Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — EGYPT.

Mr. Day: asked the Secretary of State for Foreign Affairs whether he will give particulars of the reports received from His Majesty's representative in Egypt of the differences that have recently occurred between His Majesty King Farouk and his Cabinet?

The Secretary of State for Foreign Affairs (Mr. Eden): No, Sir. The hon. Member cannot expect me to answer questions regarding the domestic affairs of friendly States.

Mr. Day: Has the Minister had any reports at all from His Majesty's representative?

Oral Answers to Questions — DANZIG.

Mr. Mander: asked the Secretary of State for Foreign Affairs whether he has any statement to make with reference to the negotiations being carried on between Danzig and Poland for the recognition of Danzig as a State; and whether, as this is a matter solely for the League of Nations, Poland has been authorised to negotiate on its behalf?

Mr. Eden: I have seen in the Press reports of the nature referred to in the hon. Member's question, but I should not like him to assume that such negotiations are in fact taking place.

Mr. Mander: Do I understand that Poland had no authority to undertake any such negotiations?

Mr. Eden: I have no doubt whatever that, if they affected any other States, or the League, the Polish Government would inform the League.

Mr. Mander: Would they have any authority to initiate negotiations without authority from the League?

Mr. Eden: That is another matter. I am sure that if there was any decision, they would refer it to the League.

Mr. Mander: Will the right hon. Gentleman inquire whether they are negotiating at all on this very important subject?

Mr. Eden: I do not share the hon. Member's anxiety.

Oral Answers to Questions — YUGOSLAVIA (MR. H. D. HARRISON'S EXPULSION).

Mr. Mander: asked the Secretary of State for Foreign Affairs what action he proposes to take with reference to the expulsion of Reuter's correspondent, Mr. H. D. Harrison, from Yugoslavia on the ground that he transmitted to foreign countries a statement that a Mickey Mouse comic strip in a Belgrade newspaper had been banned because it bore on national politics?

Mr. Eden: I was informed by the Yugoslav Government on 7th December that, in spite of repeated warnings, they had on many occasions had cause to complain of Mr. Harrison's presentation of news to the British public. The Yugoslav Government further stated that they had been obliged on the occasion of Mr. Harrison's last despatch dealing with an act of the censorship to intimate to him that his continued presence in Belgrade would be undesirable. His Majesty's Minister at Belgrade took the matter up with the Yugoslav authorities, but they informed him that they were unable to alter their decision. It will be realised that the grant or withdrawal of permission to reside in any country is entirely a matter for the Government of that country to decide.

Mr. Mander: Is it right that a British subject should be expelled from a country for such a ridiculous reason as this?

Mr. Eden: It is not a question of whether it is right. We always claim for ourselves the right to act as we think fit in relation to foreigners living in this country, and as we attach importance to this privilege, we cannot take action which contradicts it.

Mr. Mander: Will my right hon. Friend consider advising the Prince Regent to try to instil a little sense of humour into the people of his country?

Sir Joseph Nall: Will the right hon. Gentleman also suggest that they should display a comic strip relating to Mickey Mander?

Oral Answers to Questions — CHINA AND JAPAN.

Mr. Mander: asked the Secretary of State for Foreign Affairs whether he will consider the advisability of exercising the right of Great Britain, under Article 11 of the Covenant of the League of Nations, to bring to the attention of the Council the action of Japan in threatening France that the French railways from Hanoi, in Indo-China, running across the border into China, will be bombed if the transit of arms through French Indo-China continues?

Mr. Eden: No, Sir. This does not seem to be a matter for the initiative of His Majesty's Government.

Mr. Mander: Can the right hon. Gentleman say whether, to his knowledge, the French Government have been threatened in this way?

Mr. Eden: That is a question to which only the French Government can reply.

Sir Percy Harris: asked the Secretary of State for Foreign Affairs whether any specific date has been fixed yet by the Japanese Government for the payment of compensation for damage done to British lives and property at Shanghai, Nanking, and elsewhere in China?

Mr. Eden: While no specific date has been fixed, negotiations are now in progress for the payment of claims arising out of recent events in China.

Sir P. Harris: Can the right hon. Gentleman give some assurance to the people concerned that an early result is likely to accrue from these negotiations? This is a very serious matter, particularly to the people whose property is completely damaged.

Mr. Eden: I am conscious of the seriousness of the matter. Claims, as the hon. Member will appreciate, are in a different category, but we are alive to the urgency of the matter.

Mr. Arthur Henderson: Does this include the damage done at the end of last week?

Mr. Eden: I think this relates to the situation at Shanghai.

Mr. T. Williams: Are the dependants of those who have been killed being cared for by the British Government pending a settlement?

Mr. Eden: Those are particularly the class of claims which come in the first category which I have in mind.

Mr. A. V. Alexander: Can the right hon. Gentleman lay a summary of the cases?

Mr. Eden: I will consider that point. They are being compiled by our authorities at Shanghai, and I am not sure that we have the full details.

Mr. Mander: Could we also have a list of apologies which have been received?

Mr. Day: asked the First Lord of the Admiralty particulars of the reports he has received of the attack made by Japanese bombers near Nanking, on Sunday, 12th December, on the two British gunboats the "Scarab" and the "Cricket"; and of the incident in which a Japanese battery fired at the "Ladybird" in the same locality?

The First Lord of the Admiralty (Mr. Duff Cooper): I have nothing to add to the full statement which was made on Monday by the Secretary of State for Foreign Affairs in reply to a Private Notice Question on this subject.

Mr. Day: Has the injured man since died?

Mr. Cooper: No, Sir. The man who was injured is progressing favourably, according to the latest reports.

Lieut.-Commander Fletcher: asked the Prime Minister whether the advisability of reinforcing the China Squadron has been under his consideration, especially the desirability of there being some capital ships in Far Eastern waters, in view of repeated attacks upon British warships, merchant shipping, and property; and what decision, if any, he has come to?

The Prime Minister (Mr. Chamberlain): The hon. and gallant Gentleman may rest assured that the protection of British interests in the Far East is the subject of constant pre-occupation on the part of His Majesty's Government, but I have no further statement to make on this matter to-day.

Lieut.-Commander Fletcher: Is there any alternative to reinforcing, other than the present process of protests, followed by apology, followed by a repetition of the offence?

Mr. Speaker: We cannot spend any more time on this question.

Mr. J. J. Davidson: asked the Secretary of State for Foreign Affairs the total number of protests made by the British Government through official channels to the Japanese Government since 26th August, 1937?

Mr. Eden: The hon. Member will appreciate that the distinction between a protest and representations not amounting to a protest is a difficult one to define accurately. I will, however, consider whether I can furnish him with the information for which he asks.

Mr. Davidson: Is the right hon. Gentleman thoroughly satisfied that the Japanese Government are giving the consideration to these protests that we should expect them to give?

Mr. Eden: Satisfaction is almost an unknown sentiment for a Foreign Secretary.

Oral Answers to Questions — SPAIN.

Commander Sir Archibald Southby: asked the Secretary of State for Foreign Affairs whether, with a view to simplifying the arduous duties now being performed by the British Navy, he will endeavour to expedite the granting of equal belligerent rights to both sides in the Spanish civil war and the recognition of a de facto state of war?

Mr. Eden: As my hon. and gallant Friend will be aware, under the resolution adopted on 4th November, His Majesty's Government, in common with the other Governments represented on the Non-intervention Committee, have agreed that they will recognise both sides as entitled to exercise belligerent rights at sea as soon as, in the opinion

of the committee, the withdrawal of foreign nationals from Spain has made substantial progress.

Mr. Noel-Baker: May I ask whether "substantial progress" means, as has been said, 75 per cent. of the effectives present?

Mr. Eden: There will certainly need to be an agreed definition before belligerent rights are granted.

Mr. Acland: Can the right hon. Gentleman say whether belligerent rights will be qualified according to sub-paragraph (iii), I think, of the British proposals, that is to say, food, and so on, is excluded?

Mr. Eden: The hon. Member is asking me a question which he has on the Paper, and was not here to put.

Mr. Noel-Baker: Can the right hon. Gentleman say whether there is any progress towards getting an agreed definition?

Mr. Eden: Perhaps the hon. Member will put that question down.

Mr. Noel-Baker: asked the Secretary of State for Foreign Affairs whether any statement has been made by His Majesty's Government concerning General Franco's declaration of a blockade of the eastern coast of Spain?

Mr. Eden: I would refer the hon. Member to the reply which I gave on this subject to the hon. and gallant Member for Nuneaton (Lieut. - Commander Fletcher) on 8th December.

Mr. Noel-Baker: Was that reply, in effect, a refusal to recognise a right of blockade?

Mr. Eden: I think the reply was quite clear:
His Majesty's Ambassador at Hendaye has been instructed to inform the Salamanca authorities that as belligerent rights have not been recognised to either party in the Spanish conflict, His Majesty's Government are not prepared to admit their right to declare any such blockade."—[OFFICIAL REPORT, 8th December, 1937; col. 357, Vol. 330.]

Mr. Noel-Baker: While thanking the right hon. Gentleman for that explanation, may I ask whether that policy includes a refusal to recognise the right to bomb British ships from the air?

Mr. Eden: That certainly is not recognised, either, but it is a different question.

Miss Rathbone: asked the Secretary of State for Foreign Affairs whether the Non-intervention Committee has ever agreed to, or embodied in, any engagement to which the participating countries have set their hands, the proposal made by the Italian Government early in the war, to the effect that expressions of moral solidarity with one side or other should be reckoned as intervention?

Mr. Eden: I have no knowledge that any such proposal was made by the Italian Government, and no such proposal has been agreed to by the Nonintervention Committee or embodied in any engagement undertaken by the countries participating in the Non-intervention Agreement.

Miss Rathbone: May it not be taken for granted, then, that a participating Government does not commit any breach of its engagements when it expresses a moral solidarity with either of the parties in the Spanish conflict?

Mr. Eden: I am afraid that the hon. Lady must make her own deductions from my answer.

Brigadier-General Sir Henry Croft: Is it not a fact that on the day after the outbreak of the war an expression of moral solidarity came from the Soviet Union and that it has never ceased to be expressed?

Mr. Turton: asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the designation of a detachment of the Spanish republican army as the Major Attlee company; how many Englishmen are in this detachment; and whether he will represent to the Spanish Republican Government that this detachment should be redesignated, in order to avoid the suggestion that this country has committed a breach of the Non-intervention Agreement?

Mr. Eden: My attention has been drawn to Press reports on this subject, but I am not in a position to state the number of Englishmen serving in the detachment in question. In any case, I do not consider that any action is called for on the part of His Majesty's Government, since all concerned are already well aware of the views of His Majesty's Government with regard to the intervention of British

and other foreign volunteers in the Spanish conflict.

Mr. Turton: Will my right hon. Friend make inquiries through the usual channels?

Sir William Davison: Can the right hon. Gentleman say whether General Franco has been warned not to bomb this company?

Mr. Vyvyan Adams: Would the designation of the company in this particular way have any effect upon the course of hostilities?

Mr. Parker: asked the Secretary of State for Foreign Affairs the names of ships legally flying the British flag which have been fired at, sunk, or damaged by mine, torpedo, bomb, gun, or machine-gun fire on the high seas in the Mediterranean, Atlantic, and Bay of Biscay, respectively, since the outbreak of the Spanish civil war; the position when attacked and, where known, who was responsible; and what claims have been forwarded to the responsible authorities?

Mr. Eden: The ships regarding which the hon. Member desires information are, so far as I can ascertain, 25 in number. As those particulars which I am in a position to give are somewhat long, I will, with the hon. Member's permission, circulate them in the OFFICIAL REPORT. The hon. Member will appreciate that it is not possible to determine with certainty the responsibility for some of the incidents. In regard to the question of claims, I would refer the hon. Member to the answer given by my Noble Friend to the hon. Member for West Fife (Mr. Gallacher) on 10th November last.

Sir Archibald Sinclair: Can the right hon. Gentleman say, in regard to these ships about which it is possible to state with certainty, which side in the civil war was responsible for these attacks?

Mr. Eden: Yes, Sir. I think that my table will show that quite clearly. It is a very full document which has taken a great deal of work to prepare.

Mr. Noel-Baker: Can the right hon. Gentleman tell the House whether any compensation has been received from any source in any of these cases?

Following are the particulars:

The following British ships were attacked without any damage being done.*


—
Date.
Form of Attack.
Where.
Position.




1936.





1.
S.S. "Kingsborough"
20th July
Bombed
Mediterranean
—


2.
H.M.S. "Blanche"
17th August
Bombed
Mediterranean
Off Melilla.


3.
S.S. "Etrib"
31st December
Fired at
Mediterranean
1½ mile 210° Europa Point.




1937.





4.
S.S. "Blackhill"
1st January
Fired at
Bay of Biscay
Approximately 20 miles N.W. of Pasajes.


5.
H.M.S. "Royal Oak"
2nd February
Bombed
Mediterranean
36° 10′ N., 4° 45′ W.


6.
S.S. "British Endeavour."
6th February
Bombed
Mediterranean
100 miles 75° off Gibraltar.


7.
S.S. "Pizarro"
6th February
Bombed
Mediterranean
12 miles south of Adra.


8.
H.M.S. "Havock"
13th February
Bombed
Mediterranean
37° N., 1° 10′ E.


9.
H.M.S. "Gipsy"
13th February
Bombed
Mediterranean
37° N., 1° 10′ E.


10.
S.S. "Nailsea Manor"
10th March
Fired at
Bay of Biscay
40° 37′ N., 4° 53′ E.


11.
S.S. "Magdalena"
27th March
Fired at
Bay of Biscay
43° 50½′ N., 4° 05′ W.


12.
H.M.S. "Gallant"
6th April
Bombs dropped near.
Mediterranean
337° 15 miles from Cape San Antonio.


13.
S.S. "Gwenthills"
21st June
Fired at
Bay of Biscay
43° 31′ N., 3° 13′ W.


14.
S.S. "Noemijulia"
6th August
Bombed
Mediterranean
42° 13′ N., 3° 45′ E.


15.
S.S. "Bramhill"
28th August
Fired at
Bay of Biscay
136° Cape Penas 5 miles.


16.
S.S. "Carpio"
29th August
Fired at by torpedo from submarine.
Mediterranean
38° 55′ N., 0° 20′ E


17.
H.M.S. "Havock"
31st August
Torpedo attack from submarine.
Mediterranean
38° 46′ N., 00° 31′ E.


18.
S.S. "Hillfern"
10th September
Fired at
Bay of Biscay
43° 57′ N., 5° 20′ W.


19.
H.M.S. "Fearless"
17th September
Bombs dropped near.
Bay of Biscay
43° 39′ N., 5° 42′ W.


20.
S.S. "Cervantes"
8th October
Bombed and attacked by aerial torpedo.
Mediterranean
13 miles 165° from Tarragona.


21.
S.S. "Marvia"
21st October
Bombed and Machine-gunned.
Mediterranean
41° N, 3° E.


The following British ship was damaged by a mine.


22.
H.M.S. "Hunter"
13th May
—
Mediterranean
36° 43½′ N., 2° 28½′ W.


The following British ships were sunk.


23.
S.S. "Woodford"
1st September
Torpedoed by submarine.
Mediterranean
40° 24′ N., 1° E.


24.
S.S. "Jean Werms"
30th October
Bombed
Mediterranean
41° 42′ N., 3° 24 ′E.


The following British ship was slightly damaged by machine gun fire.


25.
S.S. "British Corporal."
6th August
Bombed and Machine-gunned.
Mediterranean
36° 50′ N., 2° 25′ W.


* In addition, there have been a few cases where warning shots have been fired across the bows of a British ship on the high seas, for the purpose of conveying an order to stop. As these shots were not fired at the ship they have not been included in this statement.

Mr. Davidson: asked the Secretary of State for Foreign Affairs the total number of protests made by the British Government to the representatives of the Spanish insurgent authorities since August, 1936?

Mr. Eden: The hon. Member will recall that a similar question was put to me on 13th April by the hon. Member for Wolverhampton, East (Mr. Mander) who, on my request, was so good as not to press his inquiry in view of the great


labour required both here and at His Majesty's Embassy at Hendaye and Consulates in Spain for the collection of the desired information. In these circumstances I hope that the hon. Member will not press his request.

Mr. Acland: asked the Secretary of State for Foreign Affairs whether he can make any statement on the preamble to the resolution of the Non-intervention Committee of 4th November so as to show whether it is to be understood that the proposals there referred to as contained in the Van Dulm-Hemming report are to be taken as relating only to the measures which may be necessary to render control more fully effective, or whether they extend so as to refer to the proposals relating to withdrawal of volunteers and granting of belligerent rights?

Mr. Eden: The Van Dulm-Hemming report is a confidential document which has been circulated to members of the Non-intervention Committee and sent to the two parties in Spain, but I understand that the proposals contained in it deal solely with the strengthening of control on the land and sea frontiers of Spain and are not concerned with the withdrawal of volunteers or the granting of belligerent rights.

Mr. Acland: asked the Secretary of State for Foreign Affairs whether he will give an assurance that His Majesty's Government will not make or support any proposal for the granting of belligerent rights to the parties in the Spanish conflict until an effective system of land and sea control has been established, and until the conditions laid down in paragraph 8 (iii) of the British proposals of 14th July have been fulfilled?

Mr. Eden: His Majesty's Government have accepted the resolution proposed by the Non-intervention Committee on 4th November last which provided for the granting of belligerent rights to both parties in Spain when certain conditions including the re-establishment of the control scheme and those enumerated in paragraph 8 (iii) of the British proposals of 14th July have been fulfilled.

Mr. Acland: Can the right hon. Gentleman say whether he would not require a controlled scheme a good deal more satisfactory than the one originally destroyed,

before he will proceed to grant belligerent rights?

Mr. Eden: I think that arises on the next question.

Mr. Acland: asked the Secretary of State for Foreign Affairs whether he can give an assurance that His Majesty's Government will not grant belligerent rights to the parties in the Spanish conflict without having previously given an opportunity for the matter to be discussed in this House?

Mr. Eden: His Majesty's Government, together with the other Governments represented on the Non-intervention Committee, have agreed in principle to the resolution of 4th November, of which the granting of belligerent rights, when certain other conditions have been fulfilled, forms part. Should such progress be made as enabled belligerent rights to be granted in accordance with the provisions of the scheme, His Majesty's Government, with the other nations represented on the Non-intervention Committee, would be bound to honour their undertaking. They would, however, no doubt, in accordance with normal practice, give this House an opportunity of discussing their action.

Miss Rathbone: May we gather that no such step will be taken during the Christmas Recess?

Mr. Eden: The hon. Lady must remember that the Government are bound by undertakings they have given with other Governments to implement this agreement if it can be done.

Oral Answers to Questions — LEAGUE OF NATIONS.

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs whether the recent speech of the head of the Italian State in connection with the withdrawal of Italy from membership of the League of Nations will have any effect on the policy of His Majesty's Government to seek to strengthen the League of Nations within all possible limits?

Mr. Eden: No, Sir.

Mr. Henderson: May the House take it that it is still the policy of His Majesty's Government to strengthen the League of Nations?

Mr. Eden: I think my answer is abundantly clear.

Miss Rathbone: Is it not the case that on 6th August the French Government, when they appealed to Italy to join the Non-intervention Agreement, received a reply asking for moral solidarity, and it was never answered?

Mr. Henderson: asked the Secretary of State for Foreign Affairs whether the preparatory work of the League of Nations to secure economic recovery is now completed; and, if not, whether he will take steps to have such preparatory work accelerated?

Mr. Eden: The main preparatory work of the League of Nations in regard to economic recovery was completed by the reports presented last September by the Economic Committee and by the Raw Materials Committee. The Assembly last September endorsed the recommendations of these committees and invited the Financial and Economic Organisation to pursue
the study of the methods that could suitably be applied in order to carry them into practical effect.
This study of the work is being pursued as rapidly as possible but progress in this field depends obviously on the extent to which the individual Governments are prepared to take action. In addition, the Economic Committee was invited to study a series of other questions including measures for raising the standard of living, demographic studies, international migration, and measures for the prevention or mitigation of economic depressions. The preparatory work on these subjects is not yet completed; but I am satisfied that progress is being made.

Mr. Henderson: In view of the fact that the present international tension is very largely due to economic causes, will the Foreign Secretary do what he can to expedite a study of this matter?

Mr. Eden: Yes, I think there will be general agreement that the Economic Committee of the League has done extremely good work, and we shall do all we can to expedite it.

Mr. Henderson: asked the Secretary of State for Foreign Affairs when the League of Nations committee engaged in considering a revision of the League Covenant will make its report?

Mr. Eden: The Committee on the Application of the Principles of the Covenant is holding a further meeting next month. I am unable to forecast when a final report will be issued.

Mr. V. Adams: When was this committee constituted?

Mr. Eden: I cannot say without notice.

Mr. A. Henderson: Will the right hon. Gentleman give an assurance to the House that no binding decision will be taken by His Majesty's Government that will have the effect of weakening the Covenant, without the approval of the House?

Mr. Eden: As far as I know, no immediate decision is contemplated, and even if it were, that clearly would be subject to ratification by the House.

Oral Answers to Questions — ROYAL NAVY.

MARRIAGE ALLOWANCE.

Mr. Pilkington: asked the First Lord of the Admiralty whether he will give consideration to lowering the age at which marriage allowances are given to ratings?

Mr. Cooper: It is not considered to be in the interests of the Naval Service or of the men themselves to encourage Naval ratings to marry below the age of 25. I do not propose, therefore, to lower the qualifying age for marriage allowance in the Navy.

IMPERIAL DEFENCE COLLEGE.

Mr. Crowder: asked the First Lord of the Admiralty how many officers of the Royal Navy who have served on the staff of or been students at the Imperial Defence College have now left the Active List or are unemployed?

Mr. Cooper: Both the Naval officers who have served as commandants of the Imperial Defence College have now retired. Of the six other Naval officers who have served on the staff of the college, three are not at present in appointments but none has retired. Of the 54 Naval officers who have completed the course as students since its inception six have retired but of these two are employed in a retired capacity. Of those still on the active list five are at the moment unemployed. Of the three officers of the Royal Marines who have completed the course, one has since retired.

Mr. Crowder: How does the right hon. Gentleman account for the fact that there are so many more officers from the Army and the Air Force employed, as compared with those who come from the Navy, and does not this state of affairs rather indicate that perhaps the Navy are not paying so much attention to combined staff training as the Army and the Air Force? Will the right hon. Gentleman look into the question and see how many of those now unemployed can be re-employed?

Mr. Cooper: I have not compared the figures, but I hope it is not the case that the Admiralty are not paying sufficient attention to the importance of this combined staff training. I can assure my hon. Friend that consideration will be given to his point.

Mr. Alexander: There is no question that attendance at the Imperial Defence College is not in any way a handicap to promotion?

Mr. Cooper: Certainly not.

Oral Answers to Questions — NIGERIA.

AFRICAN CIVIL SERVANTS.

Mr. Creech Jones: asked the Secretary of State for the Colonies whether he has yet received a report on the pay of Africans of university training in the Government service in Nigeria; and how soon will action be taken to improve the salaries of these Africans?

The Secretary of State for the Colonies (Mr. Ormsby-Gore): The Governor of Nigeria has forwarded to me the recommendation of the local committee appointed by him, together with his proposals made after consideration of those recommendations, with regard to the salary scales of certain classes of African civil servants. These proposals are now under examination, but in view of the intricate nature of the subject, I cannot at present estimate how soon it will be possible to reach a decision upon them.

Mr. Creech Jones: Is the report to be published?

Mr. Ormsby-Gore: I believe that it is not the intention to publish the whole of the report, but to lay sessional papers.

Mr. Riley: How does the right hon. Gentleman expect the prospective scales will compare with the scales in force for the white civil servants in similar posts?

Mr. Ormsby-Gore: I understand that the principle will be that of the repatriation assessments of the Europeans; otherwise the salaries will be assimilated in principle to similar work.

IJEBU PROVINCE.

Mr. Mathers: asked the Secretary of State for the Colonies whether he is in a position to state the result of the inquiry into the question of the proposed partition of Ijebu Province, Nigeria; and whether he has decided against partition?

Mr. Ormsby-Gore: I am not yet in a position to state the result of the inquiry to which the hon. Member refers and which, so far as I am aware, is still proceeding. The second part of the question does not, therefore, arise.

Mr. Mathers: Can no actual change take place without the consent of the right hon. Gentleman himself?

Mr. Ormsby-Gore: I believe that is so.

Oral Answers to Questions — PALESTINE.

MUNICIPAL REVENUE, TEL AVIV.

Captain Strickland: asked the Secretary of State for the Colonies whether he can provide figures showing the approximate revenue which the Palestine Government have derived from the municipality and inhabitants of Tel Aviv during each of the past three years from such items as posts, telegraphs, telephones, court fees, and other sources; and what has been the amount of the grant-in-aid from the Government towards the municipal revenues during the same period?

Mr. Ormsby-Gore: The total amount of the grants-in-aid for the period mentioned was £60,000. The amount of these grants, which is determined solely by the budgetary needs of the municipality and by the financial resources of the Government of Palestine, has no relation to the amount of revenue derived by the Government from posts, telegraphs, or other services in respect of the municipal area. In the circumstances, I should not feel justified in imposing upon the Government of Palestine the labour of extracting the revenue figures desired by my hon. and gallant Friend, and, indeed, I doubt whether it is practicable to do so.

OUTRAGES.

Colonel Wedgwood: asked the Secretary of State for the Colonies why the Revisionists, more than other Jews, are held to be guilty of reprisals in Palestine?

Mr. Ormsby-Gore: I am not aware that any such general statement has been made. My reply to the right hon. and gallant Member's question of 8th December dealt with the case of certain individual Jews some of whom appear to be Revisionists. It made no reference to the party as a whole.

Colonel Wedgwood: Is it clear that the imprisonment of the 90 Jews at the present time is not a reprisal for their criticism of the inaction of the Administration?

Mr. Ormsby-Gore: Oh, yes, Sir. It is quite clear. These people have not been tried and imprisoned; they have been placed under preventive detention because of the fear that the police have that certain individuals may encourage the idea of reprisals.

Colonel Wedgwood: As the outrages are still going on, in spite of these people being imprisoned, could they not now be released?

Mr. Ormsby-Gore: No, Sir. It is absolutely essential that in a matter in which the police have reason to believe that there are threats or encouragement to violent action, they should have the power of preventive arrest, in view of the general condition of Palestine to-day.

Colonel Wedgwood: asked the Secretary of State for the Colonies whether any further outrages, terrorist or otherwise, have taken place in Palestine during the past week; and whether he has any statement to make?

Mr. Ormsby-Gore: Several outrages, involving loss of life, have occurred during the past week. I do not think that I could usefully make any further general statement at this stage.

Colonel Wedgwood: Is the right hon. Gentleman not aware that outbreaks during the last week have been worse than for a considerable period; and are the military Forces responsible or is it his responsibility?

Mr. Ormsby-Gore: I do not think it is either the military or the civil. The fact is that one of the leading Arab notables in Haifa has been murdered by an Arab extremist and a similar attack has been made by one who is alleged to be an Arab. It is terrorism of Arab by Arab.

Mr. T. Williams: Has either of these terrorists been captured?

Mr. Ormsby-Gore: No, neither of them.

Sir P. Harris: Is the right hon. Gentleman satisfied that the police in Palestine are strong enough to deal with the situation; if not, will he consider increasing their number in order to make them an efficient force to deal with the problem of Palestine?

Mr. Ormsby-Gore: We have been increasing the police force steadily, and a large number of new men have gone out from this country in recent months. They have, of course, to be trained in knowledge of the country, and they have difficult duties, having regard to the widespread nature of the trouble in Palestine.

Colonel Wedgwood: Has the right hon. Gentleman not seen the telegram in the paper to-day saying that 13 Jews have been wounded in a 'bus?

Mr. Ormsby-Gore: I have no official information.

MUSA EFFENDI ALAMI.

Colonel Wedgwood: asked the Secretary of State for the Colonies the duration of the leave granted to Alami Bey, a member of the legal department of Palestine; when this leave started; whether salary is drawn during leave; whether any restriction was put on where the leave was to be spent; and is the grant of leave exceptional?

Mr. Ormsby-Gore: Musa Effendi Alami has been granted full pay leave for three months with effect from 11th October. With regard to the fourth part of the question, I am not aware that any special restrictions were imposed. As regards the fifth part, I understand that it was found convenient to grant this officer leave while the reorganisation of the legal department was in progress.

Colonel Wedgwood: Was not this gentleman on leave also for a long time in 1936, and would the right hon. Gentleman give details of that leave?

Mr. Ormsby-Gore: I should like to have notice of the question. I agree that he has had leave before.

Colonel Wedgwood: Was not that leave because of the criticism which was made upon him by the Royal Commission?

Mr. Ormsby-Gore: No, Sir. No criticism was passed on him by the Royal Commission. What the Royal Commission said was that at a time of racial tension it was undesirable that the functions he performed should be performed either by Jews or by Arabs, but by a British officer.

Colonel Wedgwood: Is he still receiving the pay of the office which he held then?

Mr. Ormsby-Gore: Yes, Sir.

Oral Answers to Questions — WEST INDIES (FRUIT, FREIGHTS).

Mr. Mathers: asked the Secretary of State for the Colonies whether his attention has been called to the fact that the freights for the transport of fruit from the West Indies to this country are exceptionally high and gravely handicap the trade of these Colonies; and whether he will cause inquiry to be made?

Mr. Ormsby-Gore: I do not know precisely to what the hon. Member is referring. The most important West Indian fruit is the banana, and I have not heard it suggested that banana freights are excessive.

Mr. Mathers: Will the right hon. Gentleman consider any information that I may send him?

Mr. Ormsby-Gore: I shall be glad to do so.

Oral Answers to Questions — TRINIDAD (INDUSTRIAL DISPUTES).

Mr. Creech Jones: asked the Secretary of State for the Colonies what immediate steps are being taken in Trinidad to meet the increasing unrest among sections of the working population now suffering from hardship due to the rising cost of living and onerous conditions of employment?

Mr. Sorensen: asked the Secretary of State for the Colonies whether he is aware of the continued industrial unrest in Trinidad owing to the low wage-rates and the demand for a 25 per cent. increase thereof; and whether he will initiate or advise an impartial inquiry into the grievances?

Mr. Ormsby-Gore: I have received no representations from the Colony on the matters referred to in these questions. As regards the establishment of suitable machinery for the settlement of such industrial disputes, I propose to await the report of the recent Commission of Inquiry which has already investigated the causes of the labour unrest. Their report is expected shortly.

Mr. Creech Jones: Is the right hon. Gentleman aware that there is considerable unrest, that may break out again, and that while we are waiting for the Royal Commission to report a considerable time may elapse?

Mr. Ormsby-Gore: I do not think so. I think everybody is expecting the report of this Commission very shortly, and that has caused a recrudescence of unrest of certain kinds; but the only actual incident of which I know was a temporary strike in a sugar factory. That has been settled, and everybody is back.

Mr. Sorensen: May we have a special inquiry into the wages paid in Trinidad?

Mr. Ormsby-Gore: That has just been done by the Commission.

Mr. Sorensen: When will the report be published?

Mr. Ormsby-Gore: It will be published as part of their report. As I say, it is practically complete now, but it will have to go out to Trinidad from here for the signature of the two local members.

Oral Answers to Questions — CEYLON AND MALAYA (ESTATE POPULATIONS AND SCHOOLS).

Mr. Sorensen: asked the Secretary of State for the Colonies how many Indian natives are working on the Ceylon tea plantations; how many of these are men, women, and children, respectively; and what are the daily earnings of each of these categories?

Mr. Ormsby-Gore: The figures at my disposal do not differentiate between tea and other estates; but the total Indian


estate population in 1936 was 659,311, of whom 206,530 were men, 119,520 women, and 253,261 children. For the same year the legal minimum rates of wages applicable for a working day of nine hours, including time not exceeding one hour taken for the mid-day meal, were as follow:

—
Men.
Women.
Children.




Cents.
Cents.
Cents.


Up Country
…
49
39
29


Mid Country
…
43
35
25


Low Country
…
41
33
24

Mr. Sorensen: Does not the right hon. Gentleman realise that these rates indicate a very low standard of life indeed; and, in view also of the fact that these men, women and children are not working for continuous periods, will he not take some action to guarantee to these workers a higher standard of life?

Mr. Ormsby-Gore: That is quite beyond my power; it is a matter entirely for the Ceylon Ministers and State Council.

Mr. Paling: Is there any restriction as to the age at which these children are allowed to work?

Mr. Ormsby-Gore: Oh, yes. As the hon. Gentleman knows, all these people are migratory workers who go backwards and forwards, and their conditions are settled with the representatives of the Government of India. I must make it clear, however, that it is a matter for the Ceylon Government, and not for me. I can only give information: I can take no action.

Mr. Day: asked the Secretary of State for the Colonies the number of estate schools, as at the last convenient date, that are being maintained for the children of labourers working on estates in the Straits Settlements, Federated Malay States, and Ceylon, and the rate of regular attendances of Indian children at these schools?

Mr. Ormsby-Gore: In the territories named the number of estate schools and of Indian pupils attending them were as follow in 1936:

Schools.
Children.


Straits Settlements
39
1,637


Federated Malay States
385
13,796


Ceylon
653
39,647

Mr. Day: Are facilities given to these children to acquire a knowledge of the English language?

Mr. Ormsby-Gore: No; these are almost entirely Tamil schools for Tamil people.

Mr. Day: Will the right hon. Gentleman consider giving the children such facilities?

Mr. Ormsby-Gore: English is taught in the Government schools, but in these estate schools, which are for migrant workers, it is in accordance with the wishes of the Government of India that Tamil should be the medium of instruction.

Mr. T. Williams: Is the right hon. Gentleman satisfied with a situation in which 39,000 migrant Indian children are attending schools out of a total of well over 200,000?

Mr. Ormsby-Gore: They are of all ages. I do not think it can be said that the Tamil children in Ceylon are entirely catered for by schools provided by the rubber estates; there are other schools.

Oral Answers to Questions — SIERRA LEONE (EDUCATION ORDINANCE).

Mr. Sorensen: asked the Secretary of State for the Colonies whether he is aware of the apprehension that the proposed Ordinance in regard to education in Sierra Leone will lead to the closing of schools; and whether he will give the assurance that the number of schools and school-places will not be reduced but increased after the passing of the Bill?

Mr. Ormsby-Gore: No representations have reached me to the effect stated in the first part of the question. It is the policy of the Sierra Leone Government to extend, rather than to curtail, the facilities for education; and the power to order a school to be closed, which is aimed at cases such as those in which a school may be deemed to be inefficient or to be conducted in an unsuitable building, will only be used with due care. The new Ordinance follows closely that which has been in force in Nigeria.

Mr. Sorensen: Does the right hon. Gentleman recognise that, because of the Clause in the Ordinance which gives power for the closing of schools, there is considerable apprehension; and does he further


recognise that the natives would prefer inefficient schools to no schools at all? Further, can he give the assurance asked for in the last part of my question, that the number of schools and school places will not be reduced?

Mr. Ormsby-Gore: It is very difficult to say. In this country, of course, we are carrying on, quite rightly, a campaign against bad school buildings, and so on, and I think that Sierra Leone is sufficiently advanced now, and has sufficient revenues, to make sure that any education given there is efficient, and is conducted in properly healthy surroundings.

Mr. Sorensen: May I take it that the number of school places will not be reduced?

Mr. Ormsby-Gore: I cannot tell.

Oral Answers to Questions — ROYAL AIR FORCE.

SCOTLAND.

Mr. Mathers: asked the Under-Secretary of State for Air whether there is any intention of altering the status of the Royal Air Force stations at Turnhouse and Donibristle; and what is intended to be the future position of the Royal Air Force in Scotland?

The Under-Secretary of State for Air (Lieut.-Colonel Muirhead): Changes in the disposition of units now occupying these stations are likely to take place in the early part of the coming year, but there is no intention of abandoning the use of either of them for military purposes. As regards the second part of the question, no change in the general position of the Royal Air Force in Scotland is contemplated.

Mr. Mathers: Does that mean that Royal Air Force squadrons will still be maintained at Turnhouse and Donibristle—fully equipped squadrons, not the Saturday afternoon type?

Lieut.-Colonel Muirhead: I am not quite clear what the hon. Member means by "Saturday afternoon type," but an Auxiliary Air Force squadron will still be maintained at Turnhouse, and at Donibristle the torpedo bomber squadron will be replaced by a Fleet Air Arm training establishment.

Mr. Mathers: Does this mean that the possibility of protecting the estuary of the River Forth, the City of Edinburgh and the Rosyth Naval Base is being seriously reduced?

Lieut.-Colonel Muirhead: That is rather a wider question. I can assure the hon. Member that I am quite certain that these points are being kept in mind.

MARRIAGE ALLOWANCE.

Mr. Pilkington: asked the Under-Secretary of State for Air whether consideration can be given to lowering the age at which marriage allowances are given to airmen?

Lieut.-Colonel Muirhead: The age at which marriage allowance becomes payable in the Air Force is fixed by regard to the same considerations as those which apply to the Army, and I would refer the hon. Member to the answer to a similar question which he addressed yesterday to my right hon. Friend the Secretary of State for War.

Mr. Pilkington: In view of the fact that a far greater proportion of the Air Force is stationed at home than is the case with the Army, does not my hon. and gallant Friend think that this is an unnecessary hardship for airmen, and will he not consider lowering the age to the same limit that is in force in the Navy?

Mr. Grant-Ferris: Will the Under-Secretary consider the desirability of reducing from 30 to 28 the marriage allowance age for officers?

Lieut.-Colonel Muirhead: That is a rather different question. With regard to the first supplementary question, I do not think that my Noble Friend has any immediate intention of making any alteration.

Mr. Paling: In view of the consideration that is now being given to the question of the low birth rate, may I ask whether the Ministry of Health have approached the hon. and gallant Gentleman's Department with a view to discussing this question of the handicap to earlier marriages?

Lieut.-Colonel Muirhead: I do not think there has been any direct or specific negotiation.

Mr. Mander: Is the Air Force intended for celibates only, like the Army?

DE-ICING REPORTS.

Mr. Perkins: asked the Under-Secretary of State for Air whether he is aware that a Member of this House has been refused access to certain Royal Air Force reports connected with de-icing; and whether he will arrange for these reports to be available to Members wishing to give evidence before the Cadman Committee?

Lieut.-Colonel Muirhead: I am aware that a Member of this House asked for copies of two reports relating to experimental work on de-icing carried out by an officer of the Royal Aircraft Establishment, Farnborough. These reports were two of a number of reports made by this officer in the course of his duties, and it is not the practice to disclose such reports made in the course of ordinary departmental working. I do not think it would be reasonable or right to depart from this regular practice, but the Cadman Committee has already been furnished with such information on this subject as is in the possession of my Department.

Mr. Perkins: Can I myself have access to these reports before I give my evidence on this particular subject?

Lieut.-Colonel Muirhead: No. I think that point is covered by the answer I have given.

Mr. Perkins: I wish to give notice that I shall raise this matter on the Adjournment.

FIREPROOF SUITS (EXPERIMENTS).

Sir Robert Young: asked the Under-Secretary of State for Air whether fireproof suits, which will enable pilots to escape from burning aircraft, have undergone experimental trials either by his Department or any other body; and, if so, with what result?

Lieut.-Colonel Muirhead: Reports are awaited of the trials of asbestos cloth experimental flying suits which are at present being undertaken by the Royal Air Force.

Sir R. Young: Will there be any report soon?

Lieut.-Colonel Muirhead: I hope the report will be issued shortly.

SQUADRON COMMANDS.

Mr. Cluse (for Mr. Montague): asked the Under-Secretary of State for Air

whether he can give an assurance that no Army officer who has been reported by his superior Royal Air Force officers as not being suitable to command a squadron will be posted to the command of a squadron?

Lieut.-Colonel Muirhead: Yes, Sir.

Oral Answers to Questions — FLYING BOAT "CYGNUS" (ACCIDENT).

Rear-Admiral Sir Murray Sueter: asked the Under-Secretary of State for Air whether he is in a position to give the cause of the recent accident to the Empire flying-boat "Cygnus" when taking off at Brindisi?

Lieut.-Colonel Muirhead: No, Sir, at present I can add nothing to the reply given to my hon. and learned Friend the Member for Leicester, East (Mr. Lyons) on 8th December last.

Lieut.-Commander Fletcher: Is there any breakwater to give these flying-boats a lee when there is rough weather, or do they have to land in open water?

Lieut.-Colonel Muirhead: Perhaps the hon. and gallant Member will put that question down.

Oral Answers to Questions — COURT-MARTIAL, TANGMERE.

Major Sir Reginald Dorman-Smith: asked the Under-Secretary of State for Air whether he has now received the transcript of the recent court-martial proceedings at Tangmere, in which the defending flight-lieutenant attempted to discredit a woman witness by alleging that her present marriage is bigamous and by suggesting that she had made bogus claims for compensation; whether he is satisfied that there is no foundation for these suggestions; and whether he will give instructions which will, in future, prevent the infliction of unnecessary distress upon people called as witnesses in courts-martial?

Lieut.-Colonel Muirhead: I am advised that the questions in cross-examination referred to, to which exception is taken, were legally permissible and were put with a view to discrediting the testimony of the woman witness by attempting to establish that she had made a false statement


on oath at the trial regarding her marriage and that she was a person prone to prefer unfounded claims for compensation. Her explanation in regard to her marriage was subsequently accepted by the defending flight-lieutenant, and I am advised that there was no proof that she was a person prone to prefer unfounded claims for compensation. I do not think it is for me to pronounce on the admissibility of evidence put forward at this general court-martial. If questions had been put which were inadmissible, the Judge-Advocate would have so advised the court. Defending officers have the same rights and duties as appertain to counsel, and I do not think it is desirable to issue any instructions which might embarrass them in acting as they consider best in the interests of an accused.

Sir R. Dorman-Smith: Is my hon. and gallant Friend aware that very great distress has been caused to this lady by reason of these quite unfounded suggestions; and will he try at least to make it compulsory, or anyway give instructions, that people defending officers should try to verify or get some grounds for these suggestions before making them?

Lieut.-Colonel Muirhead: I am afraid it is inevitable in law cases that distress is sometimes caused to other parties, but I hope that the answer I have given to my hon. and gallant Friend does go a good way, perhaps, to meet the distress in this particular case. With regard to the last part of my hon. and gallant Friend's supplementary question, I can only refer to what I have said already, that one has necessarily to be extremely careful how one in any way limits what is legally admissible in defending an accused person.

Mr. Garro Jones: Is the Under-Secretary aware that many of these allegations were made as the result of a telephone communication to the defending officer, which he took no steps to confirm; and is it not desirable that, while defending officers have the same rights as counsel, they should act with the same sense of responsibility as counsel?

Lieut.-Colonel Muirhead: I said in my answer that defending officers have the same rights and duties as counsel.

Oral Answers to Questions — COUNCIL OF FOREIGN BONDHOLDERS.

Mr. De la Bère: asked the Prime Minister whether he will give an early date for the discussion of the Motion standing in the name of the hon. Member for Evesham, relating to the Council of Foreign Bondholders?

[That this House is of opinion that, in view of the enormous losses sustained by the British public for the past 25 years in lending to foreign Powers, it is desirable to reconstitute the Council of Foreign Bondholders (which was incorporated under the Corporation of Foreign Bondholders Act, 1898), and that the existing Council should be dissolved and a new Council established, and that the objects and scope of the Council should be enlarged.]

The Prime Minister: In the present state of public business, I can hold out no hope of time being available for the discussion of this Motion.

Mr. De la Bère: Does the Prime Minister not realise that something must be done about this question of public lending, and that neither the Council of Foreign Bondholders nor the Foreign Transactions Advisory Committee is very fully equipped to deal with the matter, which is one of great urgency?

Oral Answers to Questions — DEFENCE.

FOOD STORAGE.

Mr. Sandys: asked the Prime Minister which Minister is responsible for the question of food storage in relation to National Defence; what is the Government's policy on this subject; and what action, if any, has as yet been taken to store additional reserves of grain or any other foodstuffs in preparation for an emergency?

The Prime Minister: In reply to the first part of my hon. Friend's question, provision for any expenditure which might be required for the purpose of food storage would fall to be included in the Parliamentary Vote for the Board of Trade. But since food storage is really a part of the larger subject of National Defence, any questions upon the policy of food storage should be addressed to the Minister for the Co-ordination of Defence. As regards the last part of the


question, I would refer my hon. Friend to the answer given to the hon. Member for Leeds, West (Mr. V. Adams) on 3rd November by my right hon. Friend the Minister for the Co-ordination of Defence.

Sir Arthur Salter: Have the Prime Minister and the Minister for the Coordination of Defence satisfied themselves personally that the progress made on this problem is really proportionate to its urgency and importance, and, in view of the fact that more than a year has now elapsed since the Food (Defence Plans) Department was created, can the right hon. Gentleman undertake to make a statement at an early date, at least as to the main decision of the Government?

Mr. Sandys: In view of the many assurances given by the Government during the last few years that they are actively considering this question, is my right hon. Friend aware of the great regret that will be felt that no decision has been reached on policy, and no definite action taken in this urgent matter?

The Prime Minister: Both those questions are questions about policy, which, I have already said, should be addressed to the Minister for the Co-ordination of Defence.

Mr. Sandys: Is my hon. Friend aware that I did address such a question to the Minister for the Co-ordination of Defence?

WIRELESS REQUIREMENTS.

Mr. De la Bère: asked the Minister for the Co-ordination of Defence whether, in view of the importance of wireless and the wireless industry in the event of war, he will state what steps he has taken to ensure that manufacturers of wireless apparatus will be in a position to extend their factories as and when the need arises?

The Minister for the Co-ordination of Defence (Sir Thomas Inskip): I am advised that, as a result of investigations which have been carried out, it has been found that manufacturing capacity already exists which would be capable of producing the wireless requirements for the defence of this country in war.

ROAD TRANSPORT.

Mr. Graham White: asked the Minister of Transport what steps have been taken to prepare lists of the available

types of road transport, or to organise local or regional committees to deal with them in case, in the event of national emergency, there should be need to mobilise the road transport system of the country?

The Minister of Transport (Mr. Burgin): I can assure the hon. Member that the importance of the matter to which he refers is fully appreciated, and that it has had, and is receiving, close consideration.

Mr. White: Is this also one of the matters within the purview of the Minister for the Co-ordination of Defence?

SEA-BORNE TRAFFIC, EAST COAST.

Mr. Maclay: asked the Minister of Transport whether he has caused any inquiry to be made into the facilities and ability of West Coast ports to handle and meet adequately the extra demands that would be made on their services if, in the event of war, it should become necessary to divert sea-borne traffic from East Coast ports to West Coast ports?

Mr. Burgin: Yes, Sir. A sub-committee of the Committee of Imperial Defence recently made a careful examination of the problems involved in a possible diversion of sea-borne traffic from East Coast ports to West Coast ports, including a preliminary examination of the facilities available at West Coast ports. As the next step I have appointed, in accordance with the recommendation of the sub-committee, a Port and Transit Committee to assist me in the formulation of detailed plans. The committee includes representatives of transport and dock undertakings, and of trade organisations. It is in communication with the various port authorities.

PETROL AND OIL SUPPLIES.

Captain Sir William Brass (for Captain Gunston): asked the Minister for the Co-ordination of Defence whether he is satisfied that in the event of war there will be sufficient supplies of petrol and oil to furnish the requirements of the military forces and to provide for all the essential public services?

Sir T. Inskip: The plans which are being made are designed to secure the object referred to by my hon. and gallant Friend.

Sir W. Brass (for Captain Gunston): asked the Minister for the Co-ordination of Defence whether the Falmouth Committee have considered the advantage to be obtained by the use of solid fuels as a substitute for oil fuels?

Sir T. Inskip: The terms of reference of the Falmouth Committee related to the production of oil from coal and certain other indigenous materials. The Committee did not, therefore, consider the use of solid fuels as a substitute for oil fuels.

Oral Answers to Questions — TRANSPORT.

FIVE-YEAR ROAD PROGRAMME.

Mr. T. Henderson: asked the Minister of Transport what steps he proposes to take to accelerate the five-year plan of road improvement and construction in view of the fact that payments tinder this plan have amounted to only £9,250,000 out of a total estimated expenditure of £100,000,000?

Mr. Burgin: Up to 30th November last, schemes have been provisionally approved amounting to over £83,000,000. Every possible effort is made to ensure that schemes of road improvement are carried through as quickly as circumstances permit, but I would remind the hon. Member that, before any scheme can be undertaken, a considerable amount of time is unavoidably taken up by preliminaries, such as the making of surveys and the preparation of detailed plans, the acquisition of land, and negotiations with the various interests concerned. This being so, I cannot regard the progress so far made with the execution of work under the Five-Year Programme as unsatisfactory. At the same time, I am giving the matter by closest attention, with the object of securing any further expedition that may be possible in the carrying out of schemes.

LICENSING AUTHORITIES.

Mr. Butcher: asked the Minister of Transport details, to the last convenient date, of the number of "A," "B" and "C" licences revoked or suspended in the area of the East Midland licensing authority and the number of vehicles affected?

Mr. Burgin: Under Section 23 (4) of the Road and Rail Traffic Act, 1933, licensing authorities are required to report to me

once a year on their proceedings. The last report from the East Midland licensing authority shows that in the year ended 30th September, 1936, he did not exercise his powers of suspension or revocation under Section 13 of the Act. I gather from statements in the public Press that he has since done so, but I do not yet know in how many cases.

Mr. Butcher: asked the Minister of Transport whether, in view of the wide powers exercised by the licensing authorities which may prejudicially affect the employment and industry of a district, he will review the working of the Road and Rail Traffic Act in this connection?

Mr. Burgin: The action of the licensing authorities in particular cases is subject to review by the Appeal Tribunal set up by Parliament under the Road and Rail Traffic Act, 1933, and a considerable number of their decisions has been reviewed on objections duly lodged by parties entitled to appeal.

Colonel Sandeman Allen: asked the Minister of Transport whether he is aware that an application by T. Ball (Leicester), Limited, for one additional licence for a vehicle of 2 tons 10 cwts., made in April, 1936, was only granted after appeal this month at a net legal cost of £288; and will he consider reviewing a system which inflicts such hardships on road hauliers?

Mr. Burgin: I have seen reports of this case in the Press. I have received no recommendations from the Transport Advisory Council that Parliament should be asked to amend the provisions of the Road and Rail Traffic Act, 1933, which relate to proceedings before the licensing authorities and the Appeal Tribunal.

Colonel Sandeman Allen: Is my right hon. Friend satisfied with the behaviour of the Traffic Commissioner in this particular case.

Captain Strickland: Is my right hon. Friend aware that in this particular case the road haulier was put to legal costs of £288, and that the court awarded him only £60 against two railway companies and other people who objected?

Colonel Sandeman Allen: In view of the unsatisfactory reply, I beg to give notice that I shall raise this matter on the Adjournment at the earliest possible opportunity.

ROAD ACCIDENTS (PEDESTRIANS).

Mr. Wakefield: asked the Minister of Transport what is the percentage of road accidents during the past three years caused by pedestrians walking at night on the near side of roads where no footpath is provided?

Mr. Burgin: Eighty-three pedestrians were killed during 1933, and 92 during 1935, in road accidents in Great Britain when walking on the near side of roads, where no footpath was available. To ascertain the proportion of these accidents which is attributable to the pedestrian involves further research, but I am having the particulars extracted from the returns for 1935, and will communicate them to my hon. Friend. I have no information as to the corresponding numbers of pedestrians injured in the circumstances stated.

Sir J. Nall: Has my right hon. Friend got the number of people who were killed by neglecting to use footpaths where they are provided?

Mr. Burgin: No, Sir.

Captain Strickland: Is it not possible to get these statistics more up to date than merely two years ago? It is impossible to keep track with this unless we have more up-to-date figures.

Mr. Burgin: The analysis of accidents to pedestrians, as to whether they were walking on the near side of the road or the footpath, is a matter involving a great deal of detail, and it is not unreasonable to ask for some opportunity to get these particulars.

ROAD WIDENING (MONMOUTHSHIRE).

Mr. A. Jenkins: asked the Minister of Transport whether any plans have been prepared for the widening of the trunk road from Newport to Abergavenny, Monmouthshire; and whether he can indicate when the work of widening the road is likely to be commenced?

Mr. Burgin: Plans have not yet been prepared, but it is expected that work on extensive widenings of this road will be commenced by 1939.

MOTOR VEHICLES (FRONT GUARDS).

Mr. Leach: asked the Minister of Transport whether he will carry out a thorough investigation into the practicability of fitting public service vehicles and

commercial motor vehicles with front guards to reduce the shock of a collision with a cyclist or a pedestrian, and to prevent the victim being run over by the vehicle?

Mr. Burgin: A large number of such devices has been examined in my Department, but I am advised that in general it is extremely doubtful whether their use would result in a lessening of injuries to persons involved in accidents.

Mr. Leach: Can the right hon. Gentleman say why it should be difficult to fix such devices to heavy motor traffic on the roads while at the same time his Department makes them compulsory on tramcars?

Mr. Burgin: It is quite a different type of construction.

HIGH-POWERED CARS (YOUNG DRIVERS).

Mr. Leach: asked the Minister of Transport whether, in view of the temptation to young drivers to drive motor cars at high speed, he will consider taking steps to prohibit the use of high-powered cars to drivers under 21 years of age?

Mr. Burgin: No, Sir. The existing age limit was laid down by Parliament in 1930 after full discussion, and any amendment would involve fresh legislation.

Sir W. Brass: Is it not the fact that some of the smaller private cars are much more dangerous than the high-powered cars?

TRAFFIC CONDITIONS, PRESCOT-LIVERPOOL.

Mr. Pilkington: asked the Minister of Transport whether he is aware that on the main road through the new housing estates between Prescot and Liverpool there is, in spite of a recent extension, still a mile and a-quarter stretch in which traffic is allowed both ways on both carriage lanes; whether he will make this road conform to the general practice; and whether, in view of the numerous tramway crossings and side roads on this stretch, he will cause more halt and other safety signs to be set up?

Mr. Burgin: I have intimated to the county council my readiness to confirm their order providing for one-way traffic on these carriage-ways. The provision of


warning and other signs is primarily the responsibility of the highway authority, but I will cause inquiries to be made into the matter.

Mr. Pilkington: In view of the number of accidents on this part of the road, will the right hon. Gentleman do what he can to expedite this matter?

Mr. Burgin: Yes, Sir.

SUTTON GAULT BRIDGES.

Mr. de Rothschild: asked the Minister of Transport whether he has yet come to any decision with regard to the proposed transfer of the Sutton Gault bridges from the Ouse Catchment Board to the Isle of Ely County Council; and whether he is yet in a position to make any order with respect thereto?

Mr. Burgin: I have already announced my decision to accede to the application of the catchment board for an order transferring the bridges to the county council, but I am not yet in a position to make the order. No avoidable delay will occur.

Mr. de Rothschild: Is the Minister aware that it is many months since the public inquiry was held in this matter; and does he not realise that the county council cannot undertake the necessary work to put these bridges into condition until the Order is made, and that at the present time a lot of heavy transport is going over these bridges which is very dangerous?

Mr. Burgin: I am waiting for the county council in the matter. They tell me that in consultation with the Board they have almost completed the preparation of a scheme, which they hope to submit to my Department before Christmas.

Mr. Leach: Is there not an error in this question, as the Ouse Catchment Board is in Yorkshire? Should it not be the Great Ouse?

Oral Answers to Questions — WAR RISERS INSURANCE.

Mr. Alexander: asked the President of the Board of Trade whether he is yet in a position to announce the Government's decision with regard to the insurance of property against war risks?

The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace): I cannot add to the answers my right hon. Friend gave on 2nd and 9th November to the hon. Member for Dudley (Mr. Joel).

Mr. Alexander: Is the Parliamentary Secretary aware that there was really no answer in that case?

Captain Wallace: I am afraid that whatever answer there was, I am unable to add to it at the moment.

Oral Answers to Questions — CINEMATOGRAPH FUND.

Mr. R. C. Morrison: asked the Chancellor of the Duchy of Lancaster, as representing the Lord President of the Council, what payments have been authorised by the Privy Council from the Cinematograph Fund to date; what was the amount and date of the last payment to the Film Institute; and what is the present balance in the fund?

The Chancellor of the Duchy of Lancaster (Earl Winterton): The payments which have been authorised by the Privy Council out of the Cinematograph Fund amount to £26,157 5s. 6d., of which £307 5s. 6d. represents administrative expenses. The last payment to the British Film Institute, being the balance of the grant for 1937, was made on 26th November last, and amounted to £850. The present balance in the fund is £15756 19s, 3d.

Oral Answers to Questions — FRIENDLY SOCIETIES' ACCOUNTS.

Mr. De la Bère: asked the Financial Secretary to the Treasury whether, in view of the uncertainty which exists regarding the laws and regulations affecting friendly societies, he will introduce legislation for the compulsory audit of friendly societies' accounts by a public auditor; and whether consideration can be given to the whole status of friendly societies throughout the country at the present time?

Mr. Munro (Lord of the Treasury): I have been asked to reply. In answer to the first part of the question, I would refer the hon. Member to the answer given by my right hon. and gallant Friend to the hon. Member for Tamworth (Sir J. Mellor) on 28th October. With


regard to the second part of the question, my right hon. and gallant Friend has no information which supports the suggestion that the whole status of friendly societies calls for consideration, but if the hon. Member has in mind certain industrial and provident societies, which are not friendly societies though sometimes so described, I would refer to the answer given by my right hon. Friend the Chancellor of the Exchequer to the hon. Member for Bassetlaw (Mr. Bellenger) on 4th November.

Mr. De la Bère: Are not some of the answers we have been getting to-day unusually unsatisfactory?

Oral Answers to Questions — BUILDING INDUSTRY.

Mr. White: asked the Minister of Labour whether he is in a position to make any statement with regard to the negotiations between employers and workers for the formulation of a scheme for payment of wet time in the building industry?

The Parliamentary Secretary to the Ministry of Labour (Mr. Butler): This matter is under consideration by the National Federations of Building Trade Employers and Operatives. I am informed that a draft scheme is being prepared by them for submission to my right hon. Friend and is now in an advanced stage.

Oral Answers to Questions — UNEMPLOYMENT (NON-CLAIMANTS' REGISTER).

Mr. White: asked the Minister of Labour whether he will state, on the last convenient date, the number of men, women and juveniles on the non-claimants' register?

Mr. Butler: At 15th November, 1937, there were 51,524 men and 35,671 women, aged 18 years and over, 10,859 juveniles aged 16 and 17 and 31,134 under 16 years of age, on the registers of Employment Exchanges in Great Britain who had no application for benefit or unemployment allowances.

Oral Answers to Questions — GREAT BRITAIN AND JAPAN.

Mr. Attlee: (by Private Notice) asked the Secretary of State for Foreign Affairs

whether he has any further statement to make relative to the position in the Far East?

Mr. Eden: Yes, Sir. As the House will recall, immediately on the occurrence of the attacks on British shipping on the Yangtse His Majesty's Ambassador in Tokyo made the strongest representations to the Japanese Government. The House will have seen that the Japanese Government yesterday addressed a Note to His Majesty's Ambassador in Tokyo concerning attacks on His Majesty's ships. The following is the text of that Note:
Your Excellency, the Imperial Japanese Government deeply regret the occurrence of incidents in which His Majesty's ships Ladybird, Bee, Cricket and Scarab were accidentally bombed on 12th December in the neighbourhood of Wuhu and Nanking and I hereby offer a profound apology in their name. I have the honour to inform Your Excellency that the Imperial Government immediately took the necessary measures to prevent the recurrence of incidents of this nature and to add that they will deal suitably with those responsible for the incidents immediately on completion of their investigations and are also prepared to pay the necessary compensation for damage to your country.
The Imperial Government earnestly hope that the occurrence of these unfortunate incidents will not impair the traditional friendship exising between our two countries.
His Majesty's Government are to-day sending a communication to the Japanese Government acknowledging the receipt of this note, defining their attitude towards the whole series of incidents and emphasising the seriousness of the situation which has thus been created, and the requirements which in their judgment flow from it. His Majesty's Government are further drawing attention to aspects of the recent grave incidents not covered by the note of the Japanese Government. In particular, they wish to be assured that action is being taken of such a character as will definitely ensure that there shall be no repetition of these incidents which, as the Japanese Government themselves realise, must impair relations between the two countries. As the note is not yet in the hands of the Japanese Government, I am unable to give the House the text, which will, however, I hope be published to-morrow morning.

Mr. Attlee: May I ask the Prime Minister whether he will be able to give a day before the House rises for the discussion of foreign affairs—a day other than the


Adjournment—so that it may be possible to have a full statement of the general range of affairs before we break up for the holidays?

The Prime Minister: I do not think it is possible for me to say more in answer to the right hon. Gentleman's question than that when I am making arrangements for next week's business I will bear his request in mind. I would suggest that conversations should take place through the usual channels.

PRIVATE BILLS.

THE CHAIRMAN OF WAYS AND MEANS reported, That, in accordance with Standing Order 87, he had conferred with the Chairman of Committees of the House of Lords, for the purpose of determining in which House of Parliament the respective Private Bills should be first considered, and they had determined that the Bills contained in the following List should originate in the House of Lords, namely:

Adelphi Estate.

Blackburn Corporation.

Bombay, Baroda and Central India

Railway. Bristol Corporation.

Chichester Corporation.

Dudley Extension.

Electric Supply Corporation, Limited.

Gateshead and District Tramways and Trolley Vehicles.

Gateshead Corporation.

Lancashire County Council (Rivers Board and General Powers).

Lee Conservancy. London County Council (General Powers).

Manchester Corporation. Middlesex County Council (General Powers).

Middlesex Hospital.

Nottingham Corporation.

Plymouth Extension.

Rickmansworth and Uxbridge Valley Water.

Royal Sheffield Infirmary and Hospital.

St. Bartholomew's Hospital.

Salford Corporation.

Saltburn and Marske-by-the-Sea Urban District Council.

Sheffield Gas.

Shropshire, Worcestershire and Staffordshire Electric Power (Consolidation).

Stockton-on-Tees Corporation.

Wakefield Corporation.

Warrington Corporation Water.

Wear Navigation and Sunderland Dock.

West Surrey Water.

West Thurrock Estate.

West Yorkshire Gas Distribution.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Empire Exhibition (Scotland) Order Confirmation Bill,

Rothesay Harbour Order Confirmation Bill,

Glasgow Boundaries Order Confirmation Bill, without Amendment.

COMPANIES ACTS.

3.50 p.m.

Mr. Bellenger: I beg to move,
That this House, being of the opinion that further provision should be made to protect the public from widespread evils resulting from fraudulent and unscrupulous business and financial operations, calls for the early introduction of legislation to strengthen the law, to amend the Companies Acts, and to establish a national investments board.
The question I am raising in this Motion is one of considerable complexity and a certain amount of intricacy and, therefore, if I deal with it as widely as I can, I hope hon. Members will bear with me if I am somewhat brief in my remarks on certain points. The last Act which dealt with this subject was passed in 1929, and consisted of nearly 400 Clauses and 12 Schedules. Therefore, in order to economise time this afternoon I propose to deal with what I consider to be the more outstanding points of company law which should have the immediate attention of His Majesty's Government. In the first place, I should like to deal with the responsibility and liability of directors of public companies. This is a matter which has been often discussed from different angles, but I want to deal with two specific features of this responsibility, particularly with the feature which concerns company prospectuses which are issued at the time application is made for subscriptions from the general public to the company on whose behalf the prospectus is issued. I think the liability and responsibility of directors for statements made in the prospectus of a public company should be much greater and more extended than at present. Indeed, I think this liability and responsibility, this extended liability, should fall not only on the directors but on the issuing house, who are, to a certain measure, responsible for the issue which they float.
In order to emphasise my point, let me give an illustration. The illustration is public property already, and will be well known to many hon. Members. It concerns oil, which I believe on the Stock Exchange is considered to be a favourite gambling counter. The chequered career of this particular company started in February, 1929. The ball was set rolling—I do not want to mention names unless it is absolutely necessary—to acquire land

in a certain part of the country in order to set up its refinery. I have no doubt that the details I am going to give will enable many hon. Members to identify the company to which I am referring. Two and a half years later that company came to grief, and was wound up. In March, 1932, another company was formed to take over the refinery and land of the previous company, and a year and a half after it in turn came to grief. Oil did not seem to be too successful a business in that part of the country. But that does not end the story, because in April, 1934, another company was formed to try its luck and took over the assets of the previous company. The company issued a prospectus and shares of various categories to the public. I would ask hon. Members to pay particular attention to what I have to say now, bceause this is the point on which my criticism mainly falls. In the prospectus issued by this public company, for which the directors presumably were responsible, they said:
The net annual profits are estimated conservatively at £120,000.
I think the issued capital amounted to £350,000, so a slight calculation will show that if the estimates had been realised a satisfactory profit would have been made for the shareholders. In August, 1935, a year after the public flotation of the company, the first report and accounts were issued and the trading prospects were described as excellent. I presume that someone must have been responsible for that statement to the public, and I assume it must have been the board of directors. In January and February of the following year knowledgeable sources on the Stock Exchange rocketing the ordinary shares of this company, 1s. shares, up to 16 times their par value, and this is where the public come in and where the public lose their money. In March of that year the progress report is issued—and again I presume that the directors were responsible for it—which said:
All sections are now in production and trading prospects for finished lubricating oil are now encouraging.
It reminds one of the statements issued during the War from General Headquarters. I assume that it was on the strength of that statement that another £50,000 second debentures were issued. Six months later the company had no


money to carry on its business or pay its staff. I hope hon. Members will not think I am exaggerating when I say that the statements made in the progress and other reports by the directors of this company were if not misleading certainly over-optimistic. That is the point to which I desire to direct the attention of hon. Members. In this case—I could give numerous others—statements were made on the responsibility of the directors in order to get the public to put their money into the company, and those statements at the time they were issued must have been devoid of a good deal of truth in view of the position of this particular company later.
There is one other matter in connection with directors to which I should like to refer. Hon. Members will know that a good deal of speculation is being carried on by directors of companies under the disguise of nominees. That is a state of affairs which I suggest should cease. Public companies are not allowed under the Companies Acts to engage in operations with their own shares and, therefore, I do not think the directors themselves should be allowed to do so under any disguise. If they want to do so, they should carry out these transactions in their own names, so that the public and the shareholders of the company can see just what they are up to.
Let me deal with the question of holding companies. This is a feature which is being widely practised in modern business. It is a comparatively modern development, and I think I can say without contradiction that it is gradually assuming large proportions. The Greene Committee, which reported in 1926, and on whose report the 1928 Companies Act was based, stated:
Shareholders in holding companies were entitled to know whether the dividends proposed to be paid by holding companies were justified by the results of the group as a whole.
The Act of 1929 contains no mention of this principle. Section 126 of that Act provides that:
The accounts of the holding company shall state how the aggregate profits and losses of the subsidiary companies have been dealt with in the accounts.
But there is a proviso which says that the statement need not mention the amount of profits and/or losses with the treatment of which the statement deals. Hon.

Members conversant with this kind of business will know that holding companies comprise not only subsidiary companies, but associated companies and sub-subsidiary companies, and I believe I am right in saying that the Act of 1929, which was a Consolidation Act, the main Act being the 1928 Act, while defining a subsidiary company, defines it so that it does not include a sub-subsidiary company. It is well known to hon. Members that under the operations of holding companies to-day a true, accurate, and complete picture of a company's operations through its constituent parts is not disclosed to the shareholders in the holding company or to the general public. I say that whatever the merits or the advantages of limited liability may be, it is not fair to shareholders who are asked to put up their money that they should be denied the information with which they can make up their minds whether their money is safe or whether they are justified in keeping their money in a company or selling out their shares.
Let me mention one illustration in passing which will underline what I have just said. I need only refer to a well known case which occurred a few years ago and which resulted in the chairman of that company, which was a large shipping company, finding himself in the dock at the Old Bailey. Although he was prosecuted, not under the company law, but under the Larceny Acts, nevertheless his conviction was due to the fact that he withheld certain information from those who were asked to subscribe to a debenture issue of the company. In the case of a single company, the Act provides that such a company, within limits, shall give as full a statement of its operations, assets, and various accounts as possible to its shareholders, but while that is definitely stated in the Act for single companies, I think there is no doubt that some further provision should be made by an amendment of the law with regard to the accounts, both balance sheets and profits and loss accounts, of holding companies.
Now I would like to deal with another feature which has been very much in the public eye in the last few months and which, I think—and I am inclined to think that many hon. Members on the Government side of the House will agree with me here—if it is not tackled by the Government at an early date, will result in widespread hardship to numerous small


investors in this country. I am referring to property investment societies. Here an anomaly arises, because these societies are not dealt with by the Companies Act of 1929. They are able to carry on their particular kind of business under another Act, but if it is not possible to alter this other Act, the Industrial and Provident Societies Act, I suggest to the hon. and gallant Gentleman that the Government should make provision to include these property societies in the Companies Act. Let it be noted that if these property societies were compelled to register under the Companies Act, 1929, they would be compelled to give much more information than they do at the present time under the Industrial and Provident Societies Act. I think I can state without fear of contradiction that this class of financial activity among a large number of property societies—I admit that there are some whose accounts would bear investigation—is rapidly becoming a public scandal, and it is a swindle and ought to be dealt with by the Government at no distant date, because this is the striking feature of this kind of investment, that it deals not with the money of the rich, wealthy owner, but with the small savings of the man or woman of comparatively moderate means.
The extent to which this particular feature is developing can be seen from this fact: I have two sources of information here, so that hon. Members will see that I am not biased. One is the "Evening Standard "and the other is the" Daily Herald." These papers have made a special investigation of these matters in their City columns, and they state that from £12,000,000 to £16,000,000 of public money are involved. I asked a question yesterday of the Financial Secretary to the Treasury as to how many property societies had been formed in recent years, and these are the figures that were circulated in the OFFICIAL REPORT. In 1934 four were registered; in 1935, 22; in 1936, 36; and in 1937, 31; giving a total of 93, so that hon. Members will see that this class of investment society is developing on a considerable scale. It is interesting to note that the paid-up share capital of 58 of the 62 property societies registered between 1934 and 1936 amounted to £116,728, so that hon. Members can draw their own conclusions from those figures. Many of

them will know that a large amount of the capital that has got into these societies is in the form of debentures, or what are alleged to be debentures, so that one can see that under the umbrella of this Act, which was passed to encourage thrift among people of small means, these speculators and gamblers are being allowed to fleece the public.
I will give two outstanding examples which have come to the notice of the public in the last few days. One concerns a property society in regard to which the Official Receiver, in the bankruptcy proceedings, said:
He had a pathetic story to unfold. Certain people who had not a lot of money had sunk their whole capital in this unfortunate company. The society's records were in a chaotic condition. It had been impossible to find important documents such as mortgages.
The other investment society was one dealt with by the Senior Official Receiver on Thursday last, and he stated that this property society was run by a gentleman of the name of Henry John Greville, a name that might have come out of Burke or Debrett, but it appears that his former name was Goldberg. This gentleman had been enabled to carry on his operations with the assistance of certain other gentlemen, two of whom were peers, with honoured titles, which they have inherited and, as far as I can see, are not entitled to on their own diligence or public service. I suggest to the hon. and gallant Gentleman that these excrescences on the business life of this country should be removed as quickly as possible, and I have reason to believe that at any rate the actions of these two titled gentlemen, who apparently knew very little about property investment, but drew some reward, I presume, from the company, are going to be further investigated.

Mr. Bracken: Is it not a fact that the person named Greville is an undischarged bankrupt

Mr. Bellenger: That may be so, and, if so, it only makes the case worse. It is interesting to note that even the newspapers are coming to the point when they will not accept advertisements from many of these property societies. The Council of Advertisers set up a committee consisting of many well-known gentlemen, one of whom was Sir Josiah Stamp, to investigate the accounts of many of these property societies, and I understand that


as a result of the report many newspaper proprietors have refused to accept their advertisements.
I propose now to direct attention to a few more features of the company law. On the question of trusts and share-pushing, I propose to say very little, because so important a matter is this in the eyes of the Government that they have set up two committees to deal with it, and those two committees have reported. The committee that dealt with fixed trusts will, I believe, soon be out of date, because I understand that fixed trusts are only a part of this type of business nowadays. We have now passed a little farther on the stage of progress of these business operations, because we have not only fixed trusts, but flexible trusts, conversion trusts, and reinvestment trusts, so that by the time the Government make up their mind to introduce legislation to deal with these they may find that they will want another committee to investigate the question anew. Suffice it to say in this respect that the Stock Exchange Committee reported as long ago as January, 1936, that a full measure of protection could only be given to the public by legislation. That is why, in my Motion, I am asking the Government to introduce legislation at an early date to implement the report which they now have in their hands. There is one other quotation which I should like to give to the House in this connection, and that is from a speech of the president of the Institute of Chartered Accountants. In October last this gentleman, Mr. Frank Lindsay Fisher, said:
The present freedom of unit trusts and their managers from any statutory regulations in the conduct of their affairs left a loophole for fraud of which advantage might be taken sooner or later if there was no proper control. The financial stability of the managers was another matter of vital importance, in view of the continuing responsibilities which managers undertook towards certificate holders.
The House will know that these unit trusts, which in many ways have desirable features, deal with a large amount of public money, and, therefore, I do not think I am overstating my case when I ask that the Government should act with all possible expedition in the matter.
Then there is the question of auditors. I will only touch on the matter briefly, because I understand that another of my hon. Friends wishes to say something

upon it. I think the duties of auditors should be extended further and that there should be some statutory provision whereby auditors can give a completer and truer picture than they are able to do at present of the affairs of the companies of which they are auditors. Only yesterday I received a letter on this subject from a gentleman in Edinburgh, and he tells me that auditors are fully alive to the fact that it is the directors and not the shareholders who can make or mar them, and they act accordingly. We know that auditors are servants of the company, but any hon. Gentleman who has some acquaintance with the conduct of the affairs of public companies knows that the directors have considerable influence at any rate in the appointment of the auditors. I may mention that the accountants themselves would welcome further powers being given to them, and it is interesting to note that a past President of the Incorporated Society of Accountants stated early last year that:
The present Companies Act, in conjunction with the almost general adoption of the subsidiary company principle, has in truth had the effect of reducing the auditors' reports to a farce.
I think many hon. Members will be inclined to agree with that statement. I propose now to come to the last sentence of my Motion, which deals with the setting up by the Government of a national investments board. I am not a fatuous optimist in this respect, and even if I were, the Amendment on the Order Paper in the name of the hon. and learned Member for Ashford (Mr. Spens) would soon disillusion me. I know that this is a contentious and controversial subject, but I have included it in my Motion for reasons with which I would now like to acquaint the House. I submit that a national investments board would be a measure by which small investors could invest their money with safety and with the backing of the Government. Hon. Members may think that this is a revolutionary idea, but I assure them that it is not. It is not a new idea, and I would even go as far as to say that the idea of a national investments board is to a certain extent in operation already.
I will give the House some figures. At the present time, the British Government securities quoted on the Stock Exchange, which are called gilt-edged securities—I hope they are—amount to nearly


£6,000,000,000 of public money invested. There is then the Post Office Savings Bank, the building societies, which largely take small money, the trustee savings banks and the National Savings Certificates, making a total of almost £8,000,000,000. That money is not in speculative forms of investment, but in gilt-edged investments, a large amount of it dealing with the affairs of the country. In addition, the Government have shareholdings in the Anglo-Iranian Oil Company, amounting to £11,250,000, and an interest in Imperial Airways.
If it is possible, I would like hon. Members to deal with this matter, on which I do not propose to speak at length, as I do not wish to take up too much time in a non-party matter; but the subject is one which ought to be dealt with by my hon. Friends, and I hope it will be. There are many eminent authorities, not necessarily Socialists, who have backed the idea of a national investments board. I hope that the matter will be looked at in a dispassionate manner, free from party politics, if that is possible in these days, with the present constitution of the Government benches. At any rate, hon. Members will be interested to know that I am strengthened in my conviction that the national investments board is inevitable sooner or later by reading a question which was asked by the hon. Member for Southampton (Mr. Craven-Ellis), who has on the Order Paper an Amendment to my Motion. Last week, the hon. Gentleman asked the Chancellor of the Exchequer:
Whether His Majesty's Government will give favourable consideration to forming a central bank constituted as a public utility corporation, not trading for profit, which will undertake all Government banking business, including the complete control of foreign exchange?
I must confess that that gave me a shock, as no doubt it also gave a shock to the Chancellor of the Exchequer; and it is interesting to note that the Financial Secretary to the Treasury replied in a positive manner to his hon. Friend by saying:
No, Sir.
Despite the answer that was given to the question, I am encouraged to hope—and I trust that is also the case with the hon. Member for Southampton—that what Labour says to-day the National Government may do to-morrow. Therefore, I am not in the slightest degree disappointed

that the hon. and learned Member for Ashford has on the Order Paper an Amendment to the last sentence of my Motion.

Sir John Withers: May I ask the hon. Gentleman a question for purposes of information? What is the machinery which he proposes for the national investments board? Would it invest in Stock Exchange securities?

Mr. Bellenger: I should be only too glad to answer that question now, but I am afraid that if I did so, the House would not be as patient with me as it has been so far. I do not wish to evade giving an answer, but I believe there are certain of my hon. Friends who will speak on this matter and who will elaborate what I am saying. There is an answer to the hon. Gentleman, not only my answer, but one which has been published by the Labour party in one of its pamphlets. I am sure the House will not accuse me of being vague on this point, but I wish to finish my speech as quickly as possible. In regard to the amendment of company law, the Government are committed, and I believe they have considerable sympathy with some of the points I have submitted today. On being questioned on the matter, the predecessor of the right hon. Gentleman the President of the Board of Trade told the House, in October, 1936, that he was considering how to deal with industrial and provident societies, but that he would rather deal with the thing wisely than make a mess of it. In November, 1936, he stated that he deferred inquiry into the revision of the Companies Act, which he admitted required revision from time to time, until fixed trusts and share-pushing had been dealt with. The right hon. Gentleman who is now President of the Board of Trade apologised, in June, 1937, for the delay in preparing a Bill to deal with fixed trusts. I do not think I am asking too much when I ask the Government to deal with this matter more expeditiously than they have done in the past.
To-day we have the spectacle of the President of the Board of Trade standing at that Box and solemnly excommunicating certain types of investments, such as soya beans and mushrooms, by bell, book and candle. Is it not a sufficient commentary on the inadequacy of our company law that it is necessary for the right


hon. Gentleman to come to the House and tell British investors not to put their money into soya beans and mushrooms? We even have the heavy artillery in the shape of the Minister for the Co-ordination of Defence being called in to broadcast from the British Broadcasting Corporation a speech warning investors about the dangers of share touts. I suggest to the House that to-day the whole structure of public industry and finance is poised on a very delicate pinnacle, and that it would not take a lot to push it over. I do not suggest for one moment that the majority of business undertakings in this country are not engaged in honourable dealing, but it is not legitimate business that will overthrow that delicately poised structure.
We know what happened in 1931. Hon. Members opposite, when talking about the economic blizzard, may for political purposes put it all down to Labour, but we know that the Hatrys and Staviskys of those days inaugurated the crisis which occurred then. The Hatrys and Staviskys of yesterday are mere prototypes; they can be, and are being, repeated, not only in this country but in other countries. I have watched in Germany the wiping out of the middle class, which is the connecting link between two strata of society. How did that occur? In Germany it occurred by inflation, and the absolute deletion of all the savings of the middle class. I suggest that we should deal with this question while there is time. I am not saying that there will be an immediate slump, but slumps occur for definite reasons, and one of those reasons is lack of public confidence, which can be caused by one large company going bankrupt. That has happened before, and the South Sea Bubbles of days gone by may be repeated.
The Prime Minister used a very significant simile when speaking on the subject of foreign affairs earlier this year, when he likened the situation to the danger of an avalanche which could be caused in the high mountains by an incautious move. How appropriate those words are to-day when applied to modern business. We have now done away with the decentralised small units of last century, and placed in their stead these modern giants of industry. One incautious move in the high mountains can cause an avalanche which will overwhelm

all those standing in its way. I understand from the Press, which has an uncanny way of making intelligent anticipations, that the Government are proposing to deal with certain parts of the Motion I have moved. I hope that is so. In conclusion, I invite the co-operation and support of all hon. Members. I have moved the Motion not because I want to deal with one particular class of the community, the investing class, but because I believe that all classes of society are so interlocked as are subsidiary companies in holding companies that what happens in the financial and business world will affect the whole of the community. I ask hon. Members to support the Motion.

4.28 p.m.

Major Milner: I beg to second the Motion.
I am confident that I shall express the view of the House when I say that we consider it a fortunate circumstance that my hon. Friend the Member for Bassetlaw (Mr. Bellenger) was lucky in the Ballot and that he selected this subject. I believe my hon. Friend has done a great public service by stressing the importance and the urgent necessity of early attention being given to this matter. I notice that in some quarters there has been some surprise that a Motion in these terms should have been brought forward by a member of the Labour party. It is often said, and certainly often thought, that members of the Labour party have little concern for any others than those who are weekly wage earners. That is untrue. It is implicit in the future system which we envisage that the best conditions should be created for all classes without distinction, and that even under the present system, subject to the general public good, such conditions should be created, regulated and safeguarded as will obtain the greatest efficiency in the economic system and the most satisfactory results for all concerned.
This Motion is proof, if proof were needed of our concern with those, in every class, who have large or small amounts of surplus money to invest. We recognise that capital is essential under any form of Government. Indeed we believe that, under the form of Government to which we look forward, more wealth will be produced and more capital will be available than ever before, and the wider


that capital is spread the better for the stability and well-being of the State. I should like to make it clear, therefore, that the Labour party are, at least, as much concerned with those who have money to invest or who hold investments, as the party opposite, and I believe that were we in power we would bring in legislation for the protection of investors which this Government would not, and, in my view, dare not introduce. We on this side of the House who support the Motion, make no general imputation against those who take advantage of the great privilege of limited liability. We believe, as was said by the Greene Committee, that most limited companies are honestly and conscientiously run. It is only right, however, from every point of view, moral, social and economic, that that privilege should not be abused even by a few, and in order to prevent any such abuse, greater control than that which at present exists is essential.
The chief difficulty in dealing with a Motion of this kind is that of compressing into a convenient form the great mass of material which is available. One might begin the consideration of this subject with the passing of the 1929 Act which was undoubtedly a great improvement on the law as it existed previously. It has been satisfactory up to a point and it put many matters which had been in doubt on a more definite basis. But I think to-day it is generally admitted that there are, literally, scores of amendments which could, with advantage, be made in that Act, either to ensure the greater safety of investors or for the purpose of strengthening and clarifying its provisions. My hon. Friend the Mover hit the nail on the head when he said that the first great necessity is to make company directors bear a real responsibility and ensure that they do the work for which they are paid. At present, the liability of directors is chiefly on an agency and not on a trustee basis, and we all know that it is exceedingly difficult to bring home a charge of misfeasance against a director.
Every day we read in newspapers and in prospectuses high-sounding names in connection with the boards of certain companies. Many of these names belong to what are known as "guinea-pig" directors who for a good consideration,

allow their names to be used by companies, usually of a rather doubtful type. They can rest secure as long as they are careful not to find out anything about the affairs of the company, and not to take any active part in its management. Thus the "guinea-pig" director is practically immune from any liability for misfeasance or responsibility for the shady transactions of his fellow-directors. People invest their money on the faith of those names in prospectuses. Yet there is no obligation on a director to take any definite part in the conduct of the business of which he is a director.
Then, under the existing law a person can hold as many directorships as he desires and many people hold far more than they can adequately fulfil. There are what are known as exchange directorships. If there is a vacancy on the board of one of the companies which a particular director and his group control, he invites a friend to take that place and in return the friend invites him to take a directorship in another company of which he has control. Neither of the exchange directors is expected to give any time or attention at all to the affairs of the company to which he has been appointed. That kind of thing occurs more frequently than many people imagine. In my view directors ought to have greater responsibility for the public money which is entrusted to them; the law should be altered so as to limit the number of directorships which a man can hold and there should be some direct personal responsibility for any breach of that rule.
In the event of the liquidation of a company, except in special circumstances, the directors should have some financial responsibility. The suggestion has been made that they should be under an obligation to return to the company the directors' fees received by them during the preceding three years, or some such period. I am referring now to ordinary directors, and not to those who serve under a service agreement or anything of that sort. Such proposals as I have outlined would ensure adequate attention being given to the affairs of the company, would give scope for other men to take up vacant directorships, and would do away with many of these "guinea-pig" directors and, generally, improve the breed.
Another important matter requiring attention is the position of the shareholders. Shareholders should be given greater means of knowledge and greater power than they have to-day. In 99 cases out of 100, shareholders have no real knowledge of the affairs of the company in which their money is invested until a crash comes. They have no means of obtaining such knowledge. In the information which the directors are bound by law to supply, very little light is usually thrown on the conduct of the company by the directors. I think the hon. and learned Member for Ashford (Mr. Spens) will probably confirm my view that directors controlling one-third of the shares in a company can always guarantee to control any situation in that company, in spite of any action taken by the remaining two-thirds of the shareholders. That amounts to dictatorship in the case of many boards of directors and is, to say the least of it, highly undesirable.
One method of providing greater knowledge for the shareholders, and certainly greater confidence, would be to set up by law in the case of every public company a committee of, perhaps, three shareholders retiring by rotation, and ineligible for re-election, to work along with the auditor of the company. The auditor should be under a statutory obligation to bring every questionable matter to the notice of that committee. That committee should have power to call a general meeting of the company, and if the directors objected, then, the power to call a general meeting should only be exercised by leave of a judge in chambers or somebody of that sort. Such a committee would work in much the same way as the Public Accounts Committee in this House, and the affairs of the company would be under continuous review. There would be no harmful publicity except where definite action was necessary, while there would be every protection for directors who were acting in good faith and in the interests of the shareholders.
Then there is the vexed and important question of holding companies. We all know that to-day, in the case of very large and important companies and corporations, the shareholders and the general public do not know, and have no means of finding out, the true state of affairs. I make no suggestion against

any particular company, but it must be admitted that the system gives great opportunities for misrepresentation and fraud. The fact that the system has not been more abused can only be attributed to the comparative honesty of the persons concerned or lack of imagination in the higher ranks of the criminal classes. A holding company's assets may consist entirely of shares in operating companies, and no information under the present law need be given, even to the shareholders, with regard to subsidiary companies except to the very limited extent provided for in Section 125 of the Act.
There are no doubt cases in which the use of subsidiary companies is a business convenience, but in the great majority of cases the system is used merely for the purpose of secrecy, so that neither shareholders nor the general public shall know what is really happening. If all the details were known, it would be found that increasingly powerful and disguised monopolies are being formed in this country day by day under the cover of the present law. The hon. and learned Member for Ashford will agree that one excellent principle which has hitherto been laid down in company law is being violated in spirit every day by these large companies. It is the principle that a company cannot hold its own shares. In effect, companies which have subsidiary companies under their control are holding their own shares, contrary to that principle of the law. My hon. Friend referred to the question of accounts. I think the aid of the accountancy profession ought to be obtained by the Government making the alterations in the law which are essential. Legislation ought to be passed to forbid one company having such a shareholding in another company as to give it complete control of that other company. If such alterations are not made, I assure the House that there will be a great shock one of these days for the people of this country.
Then there is a number of points of practice which require attention. The use of the word "bank" ought to be limited to those companies which are entitled to use it. I believe the Greene Committee recommended that step. The use of the word "bank" in the name of a company should be forbidden except in the case of a duly licensed company authorised to carry on


and actually carrying on banking business, under whatever safeguards are thought fit. I need not remind hon. Members of cases of companies calling themselves the "Bank of London," the "Bank of the United Kingdom and Ireland," and names of that sort. I am infomed that a Swiss gentleman invested a large sum of money in a company of that kind and when the company failed said that he had invested it on the strength of the use made of the term "bank" in the name of the company. As in the case of the Bank of Montreal and the Bank of Toronto, there are traditions which ought to be brought into use in this country so that that particular word should not be used except in special cases.
Then there is the practice known as stagging. Public issues are often confused and prejudiced by stagging. A form of application for shares is issued, the application goes in, and if the issue does not appear to be going well, the application is withdrawn before the actual issue is made. Such an offer ought to be made irrevocable for a specified period. Another practice point is that the nature and contents of a contract have not to be shown in a prospectus. The gross price of shares to a vendor has not to be shown, and it ought to be calculated and disclosed in a prospectus. One could go through a hundred and one points of that kind. I am assured that in America prospectuses fill from 20 to 30 pages in giving particulars of one sort and another. I do not say that we need go to that extent, but there are a great many particulars which have not yet been set out by law as having to be given in prospectuses that ought to be given. There are many dodges. I have noticed that when a private company is converted into a public company, it does not hold a statutory meeting. It is the growing practice, in order to dodge the holding of such a meeting, to register a private company and immediately afterwards convert it into a public company.
The question of nominee holdings is also of great importance. At the time of the pepper crisis, there was a good deal of feeling about them, and in particular against the practice of bank nominees. The trouble goes a good deal further than that. There are many practical difficulties in the matter, but such

a system makes it possible for foreigners, through a nominee, to hold the whole of the shares in a British company. That is an undesirable thing. No doubt some hon. Members may be able to advance a number of reasons against complete disclosure in a company's share register, but unless there is something to hide, why should it be hidden. I believe that eventually a complete disclosure of the true beneficial holders of shares will have to be made on a public register.
I should have liked to say a word about applying the provisions of the Companies Acts to all corporations, and particularly to those societies which my hon. Friend mentioned that were registered under the Industrial and Provident Societies Acts. I refer especially to the type of property and similar companies mentioned by my hon. Friend. It ought to be made clear that no reference to building societies, properly so-called, is intended. In point of fact, I believe that an investment in the best type of building society is, by the very nature of the constitution and practice of these societies, among the safest and best investing media for the ordinary man. The ordinary societies registered under the Industrial and Provident Societies Acts should clearly be brought within the scope of the Companies Acts and should be subject to the same rules as to prospectuses, circulars, and offers of shares. They ought to have registers of their mortgages at Somerset House and should be under the legal obligation to publish accounts. The Commissioner ought to have much greater powers than he has to-day.
I recommend the suggestion of a national investments board. There is some misconception of the precise nature of such a board. I am sorry that the hon. Member for Cambridge University (Sir J. Withers), who asked my hon. Friend a question on this subject, has not remained in the House. As I understand the suggestion, a national investments board would be a body backed by State guarantee and would secure an absolutely safe form of investment for all. It would be, in effect, a national concern willing to receive and to invest money for State, Empire, municipal, or any other purposes which would naturally be of social, economic or public utility value in the widest sense. It would not be, as is so frequently thought, a sort of


vetting body which merely puts its imprimatur on certain companies or stocks and shares and refusing it to others. I can conceive that such a body, backed and assisted by the Treasury, might for a time, in a limited sense and subject to certain conditions, be entrusted with the duty of preparing an approved list of securities, as is done to-day by the Treasury in the case of trustee securities. I see no objection to such a procedure, because the Treasury are always years behind the times.
Although the National Government have had it brought to their notice on many occasions, a corporation or an individual who has power only to invest in trustee securities can invest in small pieces of property if they can get it valued at the appropriate value, and yet they cannot put their money in the Central Electricity Board, because it is not a trustee security. There are many other concerns of the same kind. Such a body might serve a useful purpose in preparing in a limited way and subject to conditions, such a list as I have suggested. This board would be a valuable asset to a nation such as ours. It would be at one and the same time a medium for absolutely safe investment and a reservoir of wealth available for the general security, development, and well-being of the nation, with possibilities of eventual expansion, when nationalism has been done away with and the world has become one, to regions beyond the comprehension of any one of us to-day. It would have inimitable possibilities, backed as it would be by the money and savings of our people.
What are the Government going to do in response to this Motion? They have had committees galore on almost all the subject matters contained in it. They had a committee on unit trusts which reported almost a year-and-a-half ago. They have had a committee which reported five months ago on share-pushing. They have had recommendations from the Federation of British Industries and from various accountancy societies. All have been pressing the Government to take action, as have many hon. Members for several years. The Government so far have grossly neglected their responsibilities in this matter, and if we have no response to this Motion, many people will consider, in my view rightly, that the

Government are particeps criminis in this matter.

4.55 p.m.

Mr. Dodd: The House is grateful to the hon. Gentleman the Member for Basset-law (Mr. Bellenger) for introducing this subject. While I cannot agree with the Motion in its entirety, I am sure the House in general will sympathise with a great deal of what has been said by the Mover and Seconder. There is not a doubt in the minds of all Members that the time has come for alterations and amendments to the 1929 Act. Since that Act was introduced, there has been a considerable growth of various types of industrial organisations which have not reflected credit on people who have been associated with them. While the Seconder of the Motion started by saying that in general he could commend the honesty of those connected with industry and business, he proceeded to expand his case and rather left us with the impression that those who were in any way associated with trusts or holding companies and various subsidiary companies were not all that they should be.
I think that in general the majority of businesses in this country are run inherently honestly, and it is only the minority which bring discredit upon the whole. In the case of trusts, subsidiary companies, and all classes of new types of businesses which have been introduced in recent years, there have been defaulters, and from the point of view of organised industry employers in general would prefer the strengthening of the present Companies Act. I would like to review a few matters that have taken place since the 1929 Act was passed. Originally, the committee which considered the proposals on which that Act was based, namely, the Greene Committee, commenced its operations in 1925. It completed its deliberations in 1926, and after a period the Companies Act of 1929 was introduced and passed. That means that it is already 12 years since the Greene Committee commenced its deliberations on the revision of the company law. I contend that so much has happened during the past 12 years, and certainly during the past eight years since the introduction of the 1929 Act, that the time has come for a further inquiry into the whole of the company law. It has been said, in reply to questions in the


House, that there is no particular hurry in the matter and that nothing can be really done until we have dealt with fixed trusts, share-pushing, and bucket-shops. These are, however, only minor points in the whole fabric of company law.
There is a demand from industry and from those associated with business that further inquiry and investigation should be made. Since so much time has passed since the Greene Committee originally sat, and a period of four years had passed before legislation was on the Statute Book, I contend that the time is fully ripe for beginning a further investigation, because it is likely to take even longer in view of the complications of the different types of companies that have been formed since the Greene Committee's inquiry took place. With the knowledge that already exists on certain fixed trusts, on various forms of share-pushing and on hire-purchase legislation, etc., there is a mass of information available, and the Government should proceed by putting the whole case before a Departmental Committee for full consideration and investigation.
There is a very strong body of opinion behind the request for a revision of the company law, both from one side of the House, apparently, and from the other, and from organised industry and various bodies throughout the country. The Association of Chartered Accountants, through their president, have from time to time expressed very strong views on the matter. The Association of Incorporated Accountants have done similarly, and the Association of British Chambers of Commerce, of which I have the privilege of being an officer, have passed time and time again resolutions strongly emphasising the necessity for a revision of the 1929 Act. In 1932 the Association of British Chambers of Commerce set up a committee, which consisted of leading men in industry and accountants and men connected in every way with modern industry, to review the position, and they drew up a series of proposed Amendments. That report was made in 1933 and was furnished to the President of the Board of Trade. It was not a wide, sweeping report. Some of the Amendments were perhaps not of major importance, but at any rate it had the intention of arousing a wider interest in a revision of the company law.
Then again the Chambers of Commerce in 1933, in conference, passed a very strong resolution in favour of further Amendments of the present Act. They were not content with that, but in 1934 the Chambers of Commerce again pressed for a revision, and again in 1936. Now they have again, this year, in May, confirmed the original findings of their own committee of 1933, and they ask the Government to take action in this particular case. I feel that before any legislation can take place it is absolutely essential that full investigation should be made and evidence taken. The majority of people connected with business and the floating of new businesses are inherently honest. We had recently introduced into this House a Bill which dealt with the affairs of the private individual. The Bill was introduced by the Senior Member for Oxford University (Mr. A. Herbert), and it was essentially on a par with this type of legislation in that it dealt with minority cases rather than the majority. While that Bill touched perhaps almost every home and met with a great deal of thought and discussion throughout the length and breadth of the country, here is an Act which, passed in 1929, affects every man and woman in Great Britain. There is nobody who is not in some way affected or touched by the Companies Act. It has such wide ramifications that it is essential that it should be safe. I am not suggesting that any Act could be framed in such a way that somebody could not get around it. That has been the case with the 1929 Act, and those of us who remember the introduction of it in 1929 know that it met with a good deal of opposition in the country and from organised industry. I am quite satisfied, in my own mind, that the great majority of people who were in opposition to that Bill at the time of its introduction would be the first to support it to-day. In general it is firm and very sound, and a satisfactory background for further legislation.
The hon. Member for Bassetlaw has rendered this House a service in introducing this subject, although I cannot agree with his proposals for the establishment of a national investments board, because the suggestions and the proposals made both by the Mover and the Seconder were in such a nebulous state, if I may make that statement, that they could not expect a measure of support for them without a great deal more knowledge, at least on my


part, of what was in their minds, and I think that is the case with many hon. Members of this House. Apart from that, the House, I am quite certain, is sympathetic to the Motion which has been put forward, and I hope the Government will decide to take action upon this and will set in motion some committee or some method of working forward towards a revision at a very early date, and not necessarily reply to the House by saying, "We must first deal with new legislation with regard to fixed trusts and the control of share-pushing and bucket-shops." Rather, I hope they will be in a position to move forward towards a much wider revision of the Companies Act. I hope that we shall have before very long a plan put forward, not by private Members, but by the Government, who should assure their own supporters that they are very much alive to this particular question, and that they will assist those who are willing to help them on the side of industry in amending that Act.

5.7 p.m.

Mr. R. C. Morrison: I find myself in agreement with the last speaker and with the Mover and Seconder. The amount of unanimity which is likely to be shown in the House on the subject of this Motion, with the exception of the last several words, I think augurs well for the attitude which Members of the House are taking in regard to the necessity for an early revision of the Companies Act. The only question, it seems to me, that we shall be looking forward to when the hon. and gallant Gentleman on the Front Bench replies is whether the Government are going to make an adequate response to the request which I am sure will come from all sides of the House. For some considerable time, and during the whole of this Parliament, some of us have been periodically putting questions on this subject, but with very little success up to now. We had a Debate on share-pushing, and we have had questions of all kinds, but the last President of the Board of Trade appeared to take up the attitude, "Oh, don't bother me. I don't want to be bothered with this," and he seemed to think that it was too big a task. The hon. Gentleman who preceded me pointed out that from the time the Greene Committee was set up in 1924, five years elapsed before we were able to get the Companies Act passed. Since 1929 a great deal has

happened. It seems to me that the system of limited liability is so important a part of the commercial life of this country that the law should be examined frequently in the light of new methods and practices.
I raised the question in the House not very long ago of another evil arising out of this Act, and that is the case of the establishment and the growing numbers of what I call the "£100 companies." It is a method of evading Section 113 of the Companies Act, under which a public company, when it is established, has to give a mass of information. In the case of a public company arising out of a private company, it is not necessary to give that information, and so what has been happening lately is that small private companies have been formed, and in increasing numbers, and the private companies, after a short time, have become public companies, and thus evade Section 113 of the Act. It is not necessary for them for 15 months to hold statutory public meetings, and thus the people in charge of the companies have nearly 15 months in which to carry out whatever intentions they have, and during that time a good deal of damage has been done to the unfortunate people who have invested their money. The same thing applies, but perhaps not to the same extent, to the practice of old-established companies having a name but very little business. They are purchased because they have a name which is known. It may be that they have almost ceased to do business. They come forward as a public company, and again it is not necessary to supply the public with the information which they would have had to supply if they had originally appeared as a public company.
I and other Members of this House have on occasions during the last few years drawn attention to a most pernicious practice—and in this connection we made an attack on the legal profession—under which solicitors working in association with so-called legal societies used to take up cases of accidents. They had their representatives around hospitals and police stations and indeed in some of the populous districts. I had an instance in my own constituency in the last four months where a youngster coming home from school at about four o'clock was knocked down by a motor car, and before nine o'clock nine different


people had called on behalf of different legal aid organisations to take up the case. I understand that as a result of representations that were made, the Law Society took action in this matter, and probably the Law Society is seeing that solicitors are not involved in this disreputable practice. It has now gone out of the hands of lawyers and is coming into the hands of one-man companies, companies run by one individual. I have here particulars of one called "The London Claims Association." The London Claims Association is one person. I think the Companies Act ought to be amended to prevent one person from calling himself an association and running a business as an association and misleading the public. These organisations with grandiose titles like "the London Claims Association" and the National Legal Aid Society" and so on are really run by one man in an office. The Companies Act might be amended in order that some steps could be taken to put an end to the activities of these people who are really carrying on practices that are the cause of great distress to many working people.
The question of the responsibility of directors has already been dealt with, but I should like to quote one example. The board of Wallpapers Consolidated has just issued its first report. The prospectus, which was issued a year ago, estimated that the profits, after depreciation and directors' fees, would amount to not less than £15,000. The first report was issued this week, and the profit is £1,810. Again there seems to have been some information that has not been put in the prospectus. Someone ought to be held responsible for issuing a prospectus forecasting a profit of £15,000 when actually the profit only amounts to £1,800. In the Press to-day we read of a cinema combine which has recently changed hands. The estimate of profits by that combine in a prospectus issued as recently as January of this year was £270,000 for a full year. That would work out at £135,000 for six months. The balance-sheet for the first six months, just issued, shows that in place of a half of £270,000 the net profit is less than £20,000. That is the kind of thing which I feel ought to be dealt with.
My final example is concerned with investment trusts. I have here an advertisement issued by certain of these people.

I am not going to advertise them, but there are three points in that advertisement which, in my opinion, are deliberately calculated to mislead the public, and those who are very easily misled are the people who have been thrifty and have saved some money but have very little knowledge of investment. The advertisement says:
Invest co-operatively.
They use the word "co-operative" because they know that it makes an appeal to a very large number of thrifty people who belong to the vast co-operative societies. Then they say:
One of the oldest-established societies for co-operative investment.
But the trump card of the advertisement comes at the end:
The accounts are audited by public auditors approved by His Majesty's Treasury.
They are able to state that because they are registered under the Industrial and Provident Societies Act, and their accounts have to be audited by public auditors approved by the Treasury. Other hon. Members will doubtless give other instances, and I hope that the hon. and gallant Member who will reply on behalf of the Government will give us some encouragement to hope that action will be taken. As far as I understand it, the attitude of the Board of Trade up to this Debate has been this: Let us, first of all, clear up these side issues, bucket-shops, share-pushers, investment trusts, and that sort of thing; let us introduce legislation to clean up those scandals, and then we will see what happens afterwards.
I am not going to suggest that the hon. and gallant Gentleman is in a position this afternoon to say, or that it would be wise for him to say, that he can promise that the Government will immediately bring in a Bill to amend the Companies Act in the many directions in which it has been shown to be defective. I do not think that anybody expects the hon. and gallant Member to say that, but what we do expect is that the Government shall not push us off by referring us to the promise made in the King's Speech that a Bill to deal with share-pushing and other abuses will be introduced, and then find that it is a limited Bill confined merely to the points that I have mentioned. What we should like the hon. and gallant Gentleman to


say is that the Government are prepared to undertake the legislation for which the country is clamouring to put an end to these flagrant abuses, but that at the same time they appreciate that with the passage of years since 1929 the time has arrived for a complete overhaul of the Companies Act; that that will take time; that following the precedent which was set in the case of the previous Companies Act, it will be necessary to set up a committee to get together the evidence; and that there shall be such a committee set up, so that we may be pushing ahead with the work.

5.20 p.m.

Sir David Reid: I rise for the purpose of supporting the plea made by the hon. Member for Oldham (Mr. Dodd). Like him, I have been for a good many years a member of the Council of the Association of Chambers of Commerce. I have been a member of it during all the time when the inquiries which he told us were made by that association were in progress. I know that when this matter has been brought before the Board of Trade in the past they have taken the view that the Act of 1929 has hardly been in operation for a sufficient period to justify its amendment, but I think the views expressed in different parts of the House must convince the Government that the time has come when another committee of investigation should be appointed. I have no intention of going into details on this subject, but the growth of the system of forming subsidiary and allied companies has really brought the whole of the provisions of the Act of 1929 dealing with the publication of accounts for the information of shareholders to what is little more than nullity. For that reason alone I think farther investigations are required.
A number of points have been raised from the other side of the House, and I know that the Association of Chambers of Commerce have put before the Government a great deal of information on those points and that it is in the possession of the Board of Trade for their consideration. But there is also a number of other matters which demand attention, and I would point out that those who have been pressing this matter on the attention of the Government are not old ladies or innocent people who have speculated and lost their money, but men engaged

in the every-day conduct of trade and industry who have seen things passing before their eyes which they feel ought not to be allowed in the interests of honest business. Therefore, this is a demand to which I think the Government might fairly attach considerable weight. In the general public interest, and in view of the developments which have taken place since the Greene Committee sat, I urge the Government to accede to this general request for a new committee to be appointed to go into those matters which it has been shown need amendment since the passing of the 1929 Act. As for the suggested investments board, I only mention it to say that I, at any rate, do not support that part of the Motion, and I think that the account which was given of it was so nebulous that that part of the Motion may safely be left on one side.

5.25 p.m.

Mr. R. Acland: I do not like the emphasis which is being put upon the need for a public inquiry following the speech of the hon. Member for Oldham (Mr. Dodd). I appreciate that there may be many things which cannot be dealt with until there has been a public inquiry, but surely there are one or two reforms which can be taken in hand without the necessity of waiting for a further inquiry. I would put it to hon. Members opposite that the need for an inquiry is often advanced as a method of gaining time and postponing the likelihood of getting anything done, and that this is a matter in which they themselves ought to be pressing for action rather than hon. Members of the Labour party. It is really no part of their function to perfect the Capitalist system. That is the function of hon. Members opposite, but they are not doing their best to shield private enterprise from the attacks which are made upon it by hon. Members of the Labour party by trying to preserve intact all the opportunities which to-day people with money have for making more. It ought to be hon. Members opposite who should be pressing for the closing of any possible loopholes for abuses under the system which they defend.
In certain respects the need for action now has been proved, and no further inquiry is necessary. Among other proofs, I would submit this book, "Britain's Industrial Future," which is the report


of the Liberal Industrial Inquiry and was published in 1928. It ought to be a compulsory textbook for all Members of this House, because it contains the whole of the legislation which will be passed by this House in years to come. The ordinary progress of any idea in this country is that it is first taken up by a certain number of active and enlightened individuals, who canvass it in the Press and elsewhere for, perhaps, five or ten years. Then it is tested and, if found sound, is adopted by the Liberal party. Several years later it is approved by the next five-year group. Five years after that it finds its place in the Labour party's short-term programme, and 15 years later than that it is passed into law, in an emasculated form, by the Conservative party. Therefore, it is some guarantee of future performance that these ideas are all contained in this book, from which I will read one or two sentences, for they correspond in a remarkable way with the very able speech which we heard from the hon. Member for Bassetlaw (Mr. Bellenger):
In large companies, where shares are mainly held by the general public, abuses are increasingly frequent for which secrecy in the accounts is at least partly responsible. The common practice of publishing balance sheets which convey entirely inadequate information to shareholders is a cause of loss and of disappointment. A further abuse, namely, the growing practice of directors of dealing directly or indirectly in shares in their own companies is closely connected with the problem. It will be part of the duties of auditors to see that the publicity provisions of the revised company law are fully satisfied. If these new and onerous duties are placed on auditors it would be desirable that their tenure of office and their independence should be more fully protected.
All these ideas have been described to us in the speech of the Mover of the Motion, and these are, I think, the matters on which action could be taken without need for further inquiry. Many other things will occur to other hon. Members. The market value of the investments which are held by a company should be disclosed. There ought to be a full disclosure of the profit and loss of sub-subsidiary companies, because the law which was recently passed for the disclosure of the profits of subsidiary companies is immediately defeated if you can produce sub-subsidiary companies whose profits are not disclosed. There should be either a consolidated balance

sheet of all the companies which are held, or each subsidiary should publish a balance sheet simultaneously with the holding company. There are many other things of the same sort, the case for which is made out now and requires no further investigation.
I would like to say a word or two about the board of national investment, which is mentioned in the Motion and which now forms a prominent part of the Labour short-term programme. It was in this book several years before, and it is attacked by hon. Members opposite. I shall be interested to hear what the objection to it will be. Possibly objection arises very largely from not really understanding it. I hope that hon. Members will not object to it merely because it looks like some Government Department doing something. I know that the idea of a Government Department actually doing anything is really repulsive to hon. Members opposite, but it may be good. Everybody who talks about a board of national investment agrees that the idea is that it should start in a rather small way and should discover in actual experience its sphere of usefulness. As a start, it would be a pooling of all the activities of the Government in capital expenditure. It would be a pooling of the Post Office Savings Bank and of the Local Loans Fund. It would review capital expenditure by the Government as a whole, instead of each Department doing its own capital investment in what type of market suited it. There would be this over-seeing authority which would consider capital repayments to the Government and capital re-investment as a whole, in relation to the state of the capital market in private industry.
It was recognised by the very authoritative group of economists, recently quoted by the junior Member for Oxford University (Sir A. Salter), that there is, and will be in the future, a useful function to be performed by some authority which tries to increase public capital construction at those times in the trade cycle when private capital construction is at a minimum and vice versa. It surely would have been useful in 1929 if there had been some body which had the right and the duty to know and to understand the sum total of foreign loans being made by all the lending authorities in this country. Were not our difficulties at that time in part


due to the fact that, unknown to each other, a number of different institutions had made loans to foreign countries, cities and companies, the total of which could not be justified by the state of the finance market at home?
When we hear of the abuses which may be wrought in the private investment market in this country, and when we know how honest little people can be swindled, the functions gradually growing as a result of experience, of the board of national investments will be of growing service. It is wisely said in this book that we can never expect to defend the born gull from the born shark, but there is something to be said for starting in a small way and progressing in order to see how far we can get, along the line of establishing some kind of authority with knowledge and power to make advance investigations into the prospects of companies which ask for public money. It would be a reassurance to the public if they could be defended in that way. All those things appear to be strong recommendations for the establishment of a national investments board, and I shall be interested to know why hon. Members opposite feel that it would be such a danger to the financial community.

5.36 p.m.

Mr. Craven-Ellis: In the few minutes which I have at my disposal I would say, first of all, that the hon. Member for Bassetlaw (Mr. Bellenger) has rendered a service to the House to-day. There are undoubtedly abuses, but they are not entirely with the property societies. There are just as many irregularities under the company law. That is not a justification for letting matters stay where they are; the abuses have to be stopped in some way or other. No doubt many people have been persuaded or induced to take part in societies under the Industrial and Provident Societies Act, and there have been many loopholes for irregularities. I strongly recommend that the House should support some new regulations or legislation which will strengthen the position for the operation of property societies. There seems to be some confusion as to what is a property society and a society which is speculative. There must be a definition. I do not think there is any form of investment for the

small investor equal to that of a well-managed property company, but nevertheless, there has to be some method of controlling this form of investment. I suggest that the present regulations should be tightened up considerably in order to put a stop to misleading statements which are made by certain property societies for inducing people to invest their money.
The House has a right to know what is the position of societies, as has been found out by the Association of Property Societies. The information is a sufficient reason for some kind of Government action. The number of applications invited for the Association of Property Societies was 55, and the actual applications received numbered 18. Of those, 12 were elected to membership and 6 were withdrawn or refused by the council.

Mr. Bracken: Who elects them?

Mr. Craven-Ellis: The council is elected by the societies.

Mr. Bracken: They elect themselves.

Mr. Craven-Ellis: The association was formed for the sole purpose of trying to put a stop to these abuses, and to strengthen the position for the security of investors. Since those 12 societies were elected, no fewer than five of them have been removed from membership or have resigned. Those who resigned did so because they were not able to comply with the standards established by the council of the association. I think that that resumé discloses a situation which is not satisfactory and is good ground for the Government to consider either amending the regulations or introducing new regulations.

5.41 p.m.

Mr. T. Johnston: I hope that the hon. Member who has just resumed his seat will be able to give the House on some future occasion when we are discussing the details of Government legislation some further assurance, particularly with regard to the amount of money that these provident societies may borrow upon the strength of their investments in property. I understand that the new association to which the hon. Gentleman refers recommend their component parts to lend up to 90 per cent. of the proved value of the properties. I feel that that is not quite


safe; a very much smaller figure would be required to satisfy us on these benches.
There has been general commendation from all parts of the House of the Motion of my hon. Friend and of the speech with which he proposed it. I think it was the great Barnum who said that there was a Sucker born every minute. The Motion is not before its time. The hon. Gentleman who spoke from the Liberal benches a few minutes ago said that nothing could save the born gull from the born crook. [HON. MEMBERS: "Shark."] That is the Liberal point of view. This Motion, if it were carried, would make things more difficult for the sharks to get after the gulls. It is a crying scandal that groups of plausible thieves and rogues should be allowed rob and cheat, and that patent lies should be advertised in the Press and carried by His Majesty's mails. Notwithstanding that the police know that these are lies, thousands of people of small and moderate means are thereby defrauded of their savings to the extent of at least £5,000,000 per annum. During the past 12 months, the Director of Public Prosecutions, the Criminal Investigation Department, the City of London Police, and the President of the Board of Trade have actively run many of these rogues into jail or out of the country. I can trace about 50 of them who are either in jail now or have left these shores.
Some part of the credit for this activity is due to Mr. Speaker, who permitted me to take risks in putting the names of companies on the Order Paper week after week and asking questions about them. The effect of those Parliamentary questions has been tremendous. I should like also, if I may, to congratulate a newspaper which is violently opposed to myself and my hon. Friends on these benches—the "Daily Mail." I am told by friends in Fleet Street that it has cost the "Daily Mail" some £50,000 to stop Jacob Factor and his associates. Those who, like myself, have taken an active part in this campaign for a long time, know what it means to live in this Edgar Wallace atmosphere.
We are asking to-night that there should be registration of every broker, and I hope that the Government will specifically agree to that, and will not merely accept the vague, empty formula

of a Resolution. We are asking that every broker, everyone who traffics in shares, stocks, loans, mortgages, unit grants, or whatnot, must be registered. If I go along a street to-day and feel a pain in my epigastrium, and I see someone with a plate "M. D." over his doorway, I feel some kind of assurance that that medical man has a certain standard of qualifictions and a certain code of honour. Why we should allow sharks and rogues to run loose in the City of London among the finances of the nation without registration, either as individuals or associations, passes my understanding.
We want adequate security for the registered dealers. The £500 proposed by the Bodkin Committee is not enough. The central recommendation of the Bodkin Committee is that only persons of good character, with a good past record, who have not been proven guilty of a criminal offence, shall be permitted to register, and that they should have to put up £500. But Jacob Factor never wants to be registered; Maurice Singer never asks to be registered; they put up dummies. They are perfectly ready and willing and able to get dummies with good characters, whom they send before the Board of Trade with a cheque for £500, and behind those dummies the Jacob Factors and Maurice Singers and so on can go on as in the past. Do not let the Government forget, also, that these rogues can operate from outside these shores. They have operated from Guernsey in times past. The National Chemical Holdings Company was operated from Guernsey. They can operate from the Isle of Man; they can operate from the Irish Free State; they can operate from the Continent, and they can operate from Canada. They can run newspapers. They have run the "Financial Recorder," the "Financial Standard," and the "Stock Exchange Times." They stick at no title. And what a rogues' gallery!
I can trace 100 of them who entered this country with Canadian or American passports in two years. They get in for three months, they stay here for 2½ months, they take an aeroplane to Paris for a holiday, come back in another fortnight, and proceed for another three months to operate on British soil. Well, we had Shapiro. [Laughter.] It is no laughing matter. Shapiro, Burkaart, Baum, Primakow, Setzler, Laub, Roth,


Jacob Factor—the one-time barber in Chicago, who was alleged to have left these shores with over £1,000,000 in his pocket—and Maurice Singer, said to be a Czechoslovak. Jacob Factor and a man named Tanfield netted nearly £500,000 out of the Cambrian Trust and British Allied Estates. One hon. Member has suggested that we must stop the misleading description of company titles. What is the sense of registering "The Bank of London, Limited"? Maurice Singer ran the Bank of London, Limited, and after three years he had a cash asset in the bank of £33. He finally crashed with a deficiency of £167,000, and, when the bank came up before Mr. Justice Clauson he described the whole affair as a swindling bucket-shop. It had run for years. Then there was the Federated European Bank. It is almost incredible that the man who ran the share dealing department of the Federated European Bank had previously served four terms of imprisonment. I do not know whether that is going to be the kind of good character required. He had no assets at all. How that bank wound up I do not know, but I cannot trace it in the Bankers' Almanac.
Last week we heard about the Federal Industrial Development Bank, Limited. At one time this precious bank had 11s. 7d. to its credit, and the Lord Mayor expressed the utmost amazement that this bucket-shop bank should be allowed to go on for years under the noses of the police and under the cognisance of the Board of Trade. It was run as a share-pushing bank, and one transaction alone in its books represented £150,000. I should like to know who lost that. Fortunately, on 29th November this year, its managing director got six months, but after that six months will he be able to get on the register? We want to get on this register everyone who deals in shares, loans, mortgages, and so on. But when you have small individual transactions carried on by passing share scrip from one hand to another, are you prepared to agree that such proceedings shall not be valid unless they are witnessed by a bank agent or a solicitor? We must make everything as tight as we possibly can, on the lines of the Security Frauds Prevention Act of British Columbia. Are you going to stop individual touting by telephone? You have stopped by law touting from door to door, but the man

who goes to one door in a town, or one door in a street, and then moves off to another town or another street, is allowed to escape. Then I think the police would welcome some redefinition of what is meant by "venue of offence." If a man who commits an offence in Manchester is grabbed in Edinburgh or London, why should he not be tried in Edinburgh or London?
We have heard so much about property investment societies this afternoon that I hesitate to take up the time of the House with any further observations upon them, but I know three such societies with titled people in the forefront. I know it is really impossible to get an inquiry on the requisition of 100 shareholders, because there is no provision whereby one shareholder can get the addresses of his fellow shareholders. You can get the names, but not the addresses; they are forbidden. I believe that one of these societies has as a leading operator a gentleman who has some considerable knowledge of share pushing, and I believe, further, that there is some practice of changing names, whereby share-pushing individuals may give themselves titles. Like Lord George Sanger with his circus, they can call themselves Lord Somebody Else. I believe, also, that there is a considerable rake-off in commission from the buying and selling of property. The more an agent has to pay for a property, the bigger commission he gets, and I trust that the Government, when considering changes in the law, will see to it that there is adequate control of valuations of property. If you do not have safe valuations, the registrar will be helpless; the returns he will get will be valueless. Surely the very least that the Government can do is to prevent the traffic in shares, stocks, loans and mortgages by these property societies unless they are forthwith brought under the provisions of the Companies Acts.
I hesitate in the public interest to say now what I should like to say at some time in this House about share-pushing. I have here a share-pusher's dossier, with all the apparatus complete—photographs, transfers, and all the rest of it; but, as I know that the police are actively taking steps to examine the position in that regard, it might defeat the ends of justice were I to say from this Box what I think ought to be said about some of these mushrooms, soya bean and similar unit grant contraptions. But I ought to say


this, that, as the result of questions which I put in this House to the right hon. and gallant Gentleman and the President of the Board of Trade, specific warning was given in this House from the Front Government Bench that no more money could be safely risked in these companies. For example, on 29th November the hon. and gallant Gentleman himself repeated and emphasised the statement made by the President of the Board of Trade on the previous Tuesday that anyone investing money in soya beans or mushrooms on the unit grant basis was taking a very great risk. Probably that is as far as a Minister answering questions from the Treasury Bench could go.
What happened? In the same week in which those questions were answered, some of the most responsible journals, against which I say not a word as to their honesty and integrity, come out with flaunting advertisements on their financial pages of the Soya Bean Unit concern. I do not deny for a moment that these things slipped inadvertently into the "Daily Telegraph," the "Evening Standard" and so on; but what happens? The operators in soya beans, mushrooms, and the rest immediately reprint these advertisements and send them broadcast, hundreds of thousands of them, perhaps through the land, telling people, "See what the reputable Daily This or the Evening Something Else prints," especially when these papers are known to be wholly against those corporations whose advertisements they have inadvertently carried. Yet, inadvertently, everything the Government have striven to do has been undone. I think the B.B.C. ought to have been compelled by the Government to take a very much more active part in warning small investors up and down the land of the iniquities which were being perpetrated on them, and which are known to the police. I know of concerns that have already raked in £600,000, others that have raked in £200,000; some of them run by undischarged bankrupts, some alleged to be run by men who have been interested in the system of marriage by convenience in the City of London, men that nobody would trust, but who, with high sounding titles and beautifully got-

up literature, have been allowed to rob unsuspecting people with impunity.
I should like to say a word or two about the national investments board. We want the small man to have safety and to have assurance that his money is not being used in an anti-national enterprise, or an enterprise which is directly contrary to his own economic interests. If I am a jute worker in Dundee and put my money in an ordinary bank, I may have that money, after it has gone through various tortuous evolutions, invested in, say, the Bengal jute industry, competing with myself, cutting down my own rates of wages. If I am a collier, and put my investments, if any, into an ordinary bank, I may find it used to help the Polish coalmines. If I am a farmer, I may find my money, against my wishes, used to help some enterprise against my own economic interest. All we ask for in connection with this board is that a man should know where his savings are placed, and to what use they are put. The board will be empowered to place the money only in State enterprises, municipal loans, or public utility corporations controlled and directed by this House. If we are assured that our money is invested only in these organisations we know that we are not assisting, directly or indirectly, the enemies of our class, the enemies of our persons, or our families, or our State. To-day, we have municipal borrowings through financial houses in London on commission, with no concern whatever for municipal interests or national interests in the distribution of the available money. It was in this field that Hatry operated, and one would have expected that the Conservative party would have been the first to rush to this House for a demand that, at least, municipal loans should be allocated the cheapest possible rate by a national investments board, and not left a prey to the public money market.
Let me refer to the case of the Central Electricity Board. Anyone who wants details about this can look at the most remarkable series of articles which Mr. Francis Williams, who was then financial editor of the "Daily Herald," wrote in October, 1934. So far as I know, his figures have never been disputed. He proves that the Central Electricity Board has had to pay £8,500,000 more for its money than it would have required to


pay had it been a medium-sized municipality. That is an amazing statement, that £8,500,000 could have been saved. It is essential that we should have cheap electricity. We are all agreed that if you are going to permit the hampering and crabbing of the Central Electricity Board and similar organisations, the whole community will suffer.

Sir Arthur Salter: Is it not a fact that the Central Electricity Board has power to utilise, and, in fact, could have utilised, the Treasury guarantee, and that the extra expenditure could have been to some extent averted if they had used that power?

Mr. Johnston: On the advice of the Bank of England, I think two or three weeks before the Conversion Loan was announced, the board were induced, egged on, advised, to borrow a large sum at about 5 per cent., which they could have got at 3¾ per cent. if they had been allowed to wait another few weeks.

Sir A. Salter: I was not in any way defending, or attacking, the Central Electricity Board, but pointing out that the law does permit of the exercise of discretion.

Mr. Johnston: But they have to go for the money where the money is. If the Bank of England say, "We shall not get you the money except on X.Y. conditions," the board has to take those conditions. We are suggesting that everything in the nature of a public utility corporation should receive its money from the national investments board. All the Post Office savings and the investments of private investors and surpluses in Government hands should be pooled under the board, and allocated as far as possible to State enterprises, public utility loans and municipal corporation loans, with the object not only of safeguarding the small investor, but of strengthening the State. I hope that on some occasion we shall have an opportunity of going in more detail into this question of a national investments board. It is one of the things that ought to be discussed in this House. The hon. Member who spoke from the Liberal Benches said that it was a Liberal idea. One does not know where these ideas originate. Some of them may be 100 years old. It is true that Mr. J. M. Keynes deserves a special vote of thanks for the work he did on this matter.

He is a strong protagonist of the national investments board. The Labour party have not accepted the Liberal party's idea of a national investments board; we have amended it and extended it and the idea of control in the public interest has received support from many quarters; for example, Mr. W. W. Paine, a director of Lloyd's Bank, writing in the "Banker" for November, 1928, denounced
The waste of our national resources by the many wild-cat schemes with which we are now familiar.
He felt, he said, "some sympathy" with the Labour party demand. It was "a laudable object" and something must be done to remove
some of the attractions by which unscrupulous promoters inveigle the more ignorant sections of the community.
He did not agree to a State board, but he wanted an outside Committee control.
Then there is Hartley Withers, one of the other side's supporters, I believe. He writes in a similar strain. There is a growing feeling among men of all classes that there should be a reservoir for savings, which would be a purely national one and would guarantee the small investor against the fluctuations of War Loan up and down in the money market, which would give security and an absolute guarantee that money is not being used to provide useless aircraft concerns for taking the idle rich from London to Brighton at the week-end, or anything of that sort, when shipbuilding and agriculture are being starved.
I want to end, as I begun, by saying that the Government will not find us niggling or captious in our criticism if they are bold enough to deal with the manifold abuses which everybody in this House agrees are now obvious in the City. I do not believe that any legislation which can be introduced under the existing system will plug up all the holes. You will plug up many of them, but the Jacob Factors and the Maurice Singers and the rest will find new methods of obtaining money from the unwary. Yet it is the duty of the House to do the best it can to stop the holes and to stop the inflow of these share-pushers; to make life difficult for them, to ease the way of the police when getting after them, and to encourage the Press to take no money from them. And one thing more we can do is to set up a national investments board, which will give us the security and


safety we want and lessen the opportunities for the Maurice Singers and Jacob Factors, the rogues and cheats who have attracted so much attention this afternoon.

6.14 p.m.

The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace): The right hon. Gentleman who has just addressed the House paid tribute to various persons and organisations, including one to yourself, Mr. Speaker, for the work done in recent months in bringing some of these share-pushing rogues to book; but he omitted, as a man of his modesty would be bound to omit, to pay a tribute to himself; and I am glad to take the opportunity of saying from this Box how much anyone who has had to study this question appreciates the amount of work that the right hon. Gentleman the Member for West Stirling and Clackmannan (Mr. Johnston) has done, and continues to do, in this matter. The hon. Gentleman the Member for Bassetlaw (Mr. Bellenger) who took advantage of his luck in the Ballot to raise this question, has had a tribute paid to him by speakers from every side. I will add mine by saying that I am very glad that he has given me the opportunity to make, on behalf of the Government, a brief statement this afternoon upon matters which have been exercising public attention for some time and have provoked a large number of questions in this House by the Mover and other hon. Members. The questions raised this afternoon fall into three distinct categories. First of all, fraud open and unashamed, such as share-pushing and cognate activities; secondly, the very large question of the amendment of the Companies Act, 1929; and, thirdly, the proposal so lightly and delicately sketched by various hon. Members opposite that we should set up in this country a national investments board. In the view of the Government, the first, that is, the prevention of fraud as far as possible, is by far the most urgent and pressing; and the Government are determined to deal with those abuses which have been so very graphically described this afternoon drastically and as soon as they possibly can.
I am glad that the hon. Gentleman the Member for North Tottenham (Mr. R. C. Morrison) has said in

advance that he, for one, would not expect anybody speaking at this Box to reveal in advance full details of the legislation which is promised in the King's Speech. The House will realise that the Bodkin Committee, a very strong committee which reported this August, deals with most of the malpractices which have been discussed this afternoon, and it not only deals with them, but suggests remedies. Legislation on the lines of the Bodkin report is at this moment under active consideration, and I think that the right hon. Gentleman who has just spoken will not, on reflection, expect me in these circumstances to answer the detailed, and I admit extremely pertinent, questions which he asked. It is not at the moment possible for me to disclose the exact proposals of our proposed share-pushing legislation, but I can indicate to the House very briefly the matters which we intend to cover.
First of all, there will be share-pushing and share-hawking as generally understood. Secondly, we intend to deal with what we may call cognate activities, such as invitations to the public to participate in share, commodity, or metal pools. Thirdly, we hope to deal in this legislation with the offers of participation in mushroom and soya bean farms which I hope and believe that the exchanges of question and answer between the right hon. Gentleman and myself over the Table of this House and their reproduction by the B.B.C. may perhaps have done something to stop. Fourthly, we hope to deal in this legislation with the abuses described by several hon. Members which have arisen under the Industrial and Provident Societies Acts. It is very well known that certain property and investment societies registered under these Acts and enjoying the special privileges thus accorded to them have recently offered to the public shares or debentures without having to disclose the full particulars which they would have been required to disclose had they been registered under the Companies Act, 1929. We hope to deal with that in the forthcoming legislation.
The commodity and metal pools and what perhaps we would call "agricultural undertakings," can certainly be covered by the measures which we are going to take against share-pushers, but the case of the property and investment


societies is, I must admit, somewhat more difficult. We must remember that the particular societies to which criticism has been directed this afternoon represent only a small fraction of the societies registered under the Industrial and Provident Societies Acts. The societies registered under these Acts comprise the co-operative movement, housing societies, working-men's clubs, and a large number of bona fide and beneficent activities, which it would not be either fair or desirable to restrict; I can imagine the trouble that we would get into here if we attempted to interfere with what may fairly be described as "the Co-operative charter." But we are considering what provisions can be included in the share-pushing legislation to deal with an evil which we admit exists and which we admit there is a strong case for remedying.

Mr. R. C. Morrison: Will it include the case of the £100 companies to which I referred?

Captain Wallace: I do not think that I will go into any more detail at the moment. I should like to say something here—I think it is the most suitable point—about unit trusts. We have already had reference made to the report of the Departmental Committee on Fixed Trusts. It has received very careful consideration from the Government, and for the benefit of those hon. Members who do not happen to have read it, its main recommendations can be summarised under two heads. First of all, it is proposed that all unit trusts should have trustees of recognised status, and, secondly, that particulars as to their constitution and accounts should be available to unit holders. It is only fair to say that all reputable unit trusts have trustees of recognised status, and it is fair also to say that the great majority of these trusts have already carried out of their own volition many of the Anderson Committee's recommendations. Organisations of the type which go in for mushroom farms and soya bean farms we hope to get into the share-pushing legislation; and, therefore, I do not wish at the moment to suggest that we have in immediate contemplation legislation dealing with unit trusts as such.
I pass to the second main question with which the Motion deals, and that is the very large question of amending the Companies Act, 1929, the number of whose

Sections and Schedules has already been mentioned to the House. I can give without any qualification the assurance that the Government recognise that this Act, like other codes of law—and that is what it really is—requires periodical revision in the light of practical experience and changing conditions. The only question which the Government have to decide is whether this particular moment is appropriate, not so much for the actual revision of the Act, but for the setting up of what will have to be a wide and comprehensive inquiry which the hon. Member for Oldham (Mr. Dodd) and one or two other hon. Members said must inevitably precede it. The questions which have been raised with regard to company law during this very short Debate show clearly enough that if we are going to amend it at all, we shall have to start by setting up an inquiry which will cover the whole field. All the suggestions which have been made to-day and during the past few years the Board of Trade have noted, and the companies department of the Board of Trade have during their eight years' practical experience of the working of the Act accumulated a fair number of suggestions of their own.
Generally speaking, I think that it must be admitted—and the hon. Gentleman the Member for Oldham did admit—that the Act of 1929, which resulted from an extensive inquiry by a thoroughly competent committee, is on the whole working satisfactorily. We believe that by dealing with the specific abuses to which I have already referred by special legislation we shall reduce to a certain extent the immediate urgency for this comprehensive inquiry and possibly far-reaching revision. As this afternoon we have been discussing nothing but the shady side—indeed the very shady side—of the City, it is perhaps wise to remember when we consider further proposals for putting restrictions upon the trading community, that cases of fraud and dishonesty are comparatively few. The business methods in this country are in general honest and straightforward, and there certainly is a point, of which this House should take note, at which it becomes contrary to the public interest to hamper the legitimate activities of the vast majority in order to repress the comparatively few wrongdoers.
Moreover, despite what the hon. Gentleman the Member for Oldham has said,


I am advised that the people most competent to deal with this extraordinarily technical subject—and I hope that the House will have some sympathy for me in having to address them upon it—are not at the present moment all agreed either as to the urgency of the amendment of the Act, or of the form that amendment should take. Therefore, if the Government accept the Motion, with the Amendment which it is proposed to move if Mr. Speaker allows it, to cut out the national investments board, I must say quite categorically that such acceptance must not be taken as meaning that "early legislation" in so far as the amendment of the Companies Act is concerned means "in the spring."

Mr. R. C. Morrison: Does that mean that the hon. and gallant Gentleman is now definitely saying that the Government do not intend to set up a committee which he says must be set up?

Captain Wallace: No, I am not saying that at all. I am saying that I am not in a position to give any assurance as to exactly when it will be set up.

Mr. Lees-Smith: The Government are going to introduce legislation in regard to share-pushing. Does the hon. and gallant Member mean that they will introduce legislation to deal with certain defects in the Companies Acts fairly early, and then await the result of the inquiry for more comprehensive legislation?

Captain Wallace: I hoped that I had made myself clear. What it is intended to do is to introduce a Bill in the near future dealing with share-pushing and with the various cognate activities which I classified under four heads. What I have tried to convey to the House is that in so far as a general comprehensive reform of the Companies Acts is concerned I cannot do more than say that the Government recognise the need for setting up an inquiry, which must precede such reform. I can give no definite assurance that it will be set up in the Spring or that legislation will follow immediately. Anyone who looks at the legislative programme of the Government will realise that it would not be very easy to find time for such legislation for some time.

Mr. Bellenger: Does the hon. and gallant Member recollect that the Greene Committee, which reported in 1926, took a very long time on its deliberations? As the suggested committee will probably need at least two or three years to complete its investigations, may I ask whether it is proposed to set up the committee at a very early date, apart from the Government's immediate legislation?

Captain Wallace: I am quite prepared to take the hon. Gentleman into my confidence. Hon. Members will realise that if that committee of inquiry is to be effective, it must have extremely strong Departmental representation from the Board of Trade. It will mean a great deal of extra work in a Department which at the moment is very hard worked. One of the reasons which I think would induce my right hon. Friend not to give a guarantee to set up the committee immediately, is that it would be advisable, for obvious administrative reasons, and would probably expedite the deliberations of the committee, if we could, so to speak, clear the decks by getting the share-pushing legislation out of the way first.
Let me now deal with the question of a national investments board. I am not very much wiser as to what that board is going to do than I was when the Debate started, because while the right hon. Gentleman opposite suggests, if I understood him aright, that it would be a kind of reservoir for accumulating the savings of the people and allocating them to various beneficial public works, the hon. Member for Barnstaple (Mr. Acland), who represents the Opposition Liberal party, gave me the impression that the national investments board was going to be a sort of organisation for "vetting" securities. The full case will be dealt with later by my hon. Friends, but it seems to me that the need for a national investments board must rest on one of two grounds. Is it of any value to the small investor or is it of any value to the State? Its value to the small investor must depend upon the answer to the question whether there is at present insufficient opportunity for the investment of small savings. I believe the answer to that question is in the negative.
There is in fact no lack of opportunity for the investment of small savings at a


reasonable rate of interest in sound and unimpeachable securities. Some £1,200,000,000 is invested in the Post Office Savings Bank, the Trustee Savings Banks, and in National Savings Certificates. I will not weary the House with the precise terms that one can get by investing in those securities, but simply add that if people wish to get a little more interest and are willing, as one has to be in this world if one wants a little more interest, to risk some capital fluctuation, the small investor can invest through the Post Office Savings Bank in denominations as low as £5, in Government securities, and get 3¼ per cent. For those people who are willing to take a little bit more chance, there is the building societies field, in which £600,000,000 is already invested.
The right hon. Member who has just spoken was concerned as to where the money went. National Savings Certificates go to the reduction of Government debt, and the deposits in the Post Office Savings Bank and the Trustee Savings Banks are invested in Government securities and in advances guaranteed by the Government. A considerable amount is invested in local loans, which finance the smaller authorities; and no less than £100,000,000 has been advanced for telephone and other Post Office capital expenditure. The right hon. Member quoted the case of a man in Dundee who lends money to a bank and the bank proceeds to finance his competitors in Bengal. It would have been much more sensible for that man to have put his money into a trustee savings bank; he would have got as good interest and would know that it was a local concern, and the money would probably be invested locally.
There is then the other aspect, the question whether it would be to the advantage of the State to establish a national investments board. It has been suggested that better facilities might be provided for financing sound concerns. Anyone who considers the amount of the National Debt to-day may well wonder whether it would be wise for the Government to contemplate any addition to their national indebtedness by borrowing a further unlimited amount to be used for an unspecified purpose. The Government have been willing to use Government credit for specific purposes. There is the purchase of coal royalties, and there are the loans for railway extensions around

London and in other places. Therefore, I say that neither upon the ground that the small investor is unduly handicapped by lack of opportunities for investing nor that the proposal would be of benefit to the central Government, has any case been made out for a national investments board.
We have been for three hours discussing fraud, trickery and chicanery. I only hope that people will not think that while I have been sitting almost alone on this bench I am the representative of the crooks, and that I am here to defend them. I have already said that the Government intend to deal drastically and immediately with those abuses which can be checked by legislation. I would ask the House not to let us lose our sense of proportion during this extremely important and interesting Debate. The consequences for the poor people who are robbed of their savings by these sharks are, of course, terribly serious; but there is a certain amount of truth in what the right hon. Gentleman said from the Front Bench opposite, that "nothing can save the born gull from the born shark." The point that I want to emphasise is that the sum of the loss inflicted upon these people, enormous as it sounds this afternoon, is insignificant compared with the aggregate volume of transactions carried out in the City of London alone every day in perfect good faith, both on the Stock Exchange and off it.

Mr. E. J. Williams: Not insignificant for the poor people.

Captain Wallace: I said that they were certainly not insignificant to the poor people, but I am asking that the House should not lose its sense of proportion. We have in this country a reputation for scrupulous integrity which, in spite of anything that has been said this afternoon, has made this country, and London in particular, the financial centre of the world. The Government are perfectly ready to accept the hon. Member's Motion provided he is willing to delete from it the only part to which we cannot agree. I hope, therefore, the House will see its way to pass the Amendment, and thereby allow the Government an opportunity of recording their concurrence with the rest of the Motion which the hon. Member for Bassetlaw so very ably moved.

6.41 p.m.

Mr. Spens: I beg to move, in line 4, after "law," to insert "and."
The main effect of this and the following Amendment is to leave out the national investments board. Before I deal with that part of my subject which directly relates to the investments board, I should like to express my thanks to the Mover of the Motion for the opportunity, which is the first there has been during the five years I have been a Member of this House, of having even as much as four and a-half hours for the discussion of company law. It is highly desirable that this House should at intervals discuss that part of our commercial activities. I also want to associate myself with the closing words of my hon. and gallant Friend. We have to realise that far the greatest proportion of the business transactions in this country are done in the most perfect good faith and mutual trust, and that applies to those persons who are handling the moneys of poor people. The great mass of that business is done very often by a nod or a note on the back of an envelope, without any sort of legal formalities, and it goes straight through without the least bad faith. The ordinary man does not go to the city and to his business every day with the intention of defrauding anybody or the expectation of being defrauded by anybody. He goes in the belief that in good faith business will go through on the basis of mutual credit.
The moment the system of limited liability was introduced into this country, instead of the old system of business being done by an individual in his own name or by partnership, we got rid at once of the greatest of the sanctions against dishonesty, namely, the liability of the private individual or the partnership to the last penny of their private fortunes if anything went wrong. The moment the system of limited liability was introduced we got a much more speculative element coming into the business of the country, because there are many men, not only dishonest men, but perfectly honest men, who are prepared to go into a venture where they know that if anything goes wrong their losses are limited by the amount of capital they put in. That fact undoubtedly opened up the opportunity for the dishonest. The dishonest man is always trying to get the money of other

people. As the company laws have grown we have hedged round more and more by regulations and rules the methods by which money can be obtained from members of the public. In 1929 we thought that we had got a really tight system of rules under the Companies Acts with regard to invitations to the public, either by prospectus for direct application or by offers to sell shares which had been allocated to some one else. We thought that we had hedged round the practice of house-to-house hawking. But the more this House attempts to prevent the dishonest man getting the money of other people dishonestly so surely he finds a new loophole in a few months. Hence during the last eight years new methods of obtaining money from the public have arisen which are not subject to the conditions of the Companies Acts.
We have had what I consider in many cases—I do not think it is too strong to call it—a prostitution of the Industrial and Provident Societies Act machinery. The reason why it has been used is because you can approach the public without any of the obligations which obtain under the Companies Acts. I do not want to say a word more than is necessary about unit trusts, in respect of which we are going to have legislation. Once they are established, they depend on a strong system of equitable jurisdiction over trusts which if ever it is called in aid in respect of frauds will be amply sufficient to deal with them, but there is no question that in the original invitation to the public to subscribe to them the provisions of the Companies Acts do not apply, and they make invitations which they could not possibly make under the Companies Acts. These are the pressing wrongs which have to be dealt with, and I was delighted to hear that in the legislation which is under preparation it will deal with these methods, under which it is possible at the present time to obtain money from the public by unfair statements of what is proposed, which are not covered by the Companies Acts.
We have heard this afternoon instances given as to the way in which the Companies Acts want amendment in other respects. I could add to those instances for half an hour. It is terribly easy to point them out and to pick holes in the Companies Act, 1929, which was one of the most carefully prepared Bills that ever passed this House, but it is very


difficult to find, whether you are among lawyers or accountants or business men, what is the right method of remedying these abuses. Even on the purest accountancy matter, what ought to be the form of the balance sheet of a trading company with subsidiaries, if you got six accountants round a table and they sat all night, you would not get any agreement. On any other matter which we know is not just right, it is very often difficult to get any measure of agreement as to how it should be put right. Therefore, I support strongly the attitude of my right hon. and gallant Friend that before we attempt to amend the Companies Acts we should have a full inquiry and consider what are the proper amendments to make, otherwise we shall be simply wasting our time. [HON. MEMBERS: "Four years."] That would not be a bit too long, because although these points are important, they are not anything like so important as the legislation which is going to prevent the public having their money taken from them improperly.
I could speak for hours on the general subject, but I must come to the point, the only point on which we find ourselves compelled to disagree with the Motion. What in the world is the good of a national investments board? The hon. Member the Mover of the Motion wisely left it to his junior who spoke after him, but his junior was very nebulous, and he left it to other people. It was not until the hon. Member on the Liberal benches below the Gangway spoke that anyone attempted to go into detail. If the hon. Member below the Gangway put it forward as a Liberal idea then I cannot congratulate him upon it. In the first place, I cannot see what is the difference between the function of a national investments board and that which the Treasury at present play in regard to every single sum of money that is raised and spent by the Government. The only idea seems to be to substitute a new board called the "national investments board" for the Treasury. I do not know whether they are to be national servants or not. That is perfectly worthless, and I much prefer the tried Treasury officials and system which we have in this country. The hon. Member below the Gangway also envisaged that it might grow into some sort of a bottle-neck, through which

money would pass from poor people into investments. I do not think the hon. Member mentioned a Government guarantee, but if he did not the board would be nothing more than the most gross misrepresentation of a national board for poor people who are to invest through it.
If all that the hon. Member envisages is a bottle-neck through which the investments of poor people are going to pass into a number of different investments, then of course there must be a guarantee against capital fluctuations, and, of course, after the money has passed through this bottle-neck there is no body of men who can control what happens to it afterwards. That depends on the particular venture and the particular men who manage it. That surely can be done just as easily through ordinary private resources, through the banks who can give them good advice as to what they think is a good investment. But the right hon. Member for Stirling and Clackmannan (Mr. Johnston) made it clear that in his view a national investments board was going to carry with it a guarantee of principal and interest to the poor people who invested through it. The basis of the idea is that the poor person's investment shall be handed to some central body which is to carry a Government guarantee. I am not in the least surprised that that suggestion should come from the Socialist benches. It is entirely in accordance with their principles, but it is entirely adverse to everything for which we stand. There is a whole mass of Government securities in which poor persons can invest at the present moment. This would simply be a body of some kind to which they would send their money, a body carrying a Government guarantee of capital and interest, and that body would distribute the money among certain types of investments.

Mr. Bellenger: They can do it through the Post Office.

Mr. Spens: You can do it through the Post Office now. The poor person can put his money in high class investments, and the speech of the right hon. Member opposite indicated that in his view this body would confine the investment of this money solely to high class investments. The moment you go beyond that you will have a body controlling every sort and kind of activity, from public


utility companies down to privately run companies. The hon. Member who moved the Motion never explained it, but the right hon. Member opposite did, and what he is asking the House to vote for is one huge Government holding company, with a Government guarantee. Thus if anything went wrong it would form a charge on the taxpayers. That is the idea. [Interruption.] If I am wrong, I am not going to apologise, because the hon. Member never explained it, and the hon. and gallant Member who seconded it never explained it. We had some idea from the hon. Member on the Liberal benches and a short speech from the right hon. Member opposite. I am not going to apologise if I am wrong after such an explanation as that, and we may have a much longer time to go into this matter on a later occasion. With the vague views which I have been able to gather from what hon Members have said I hope the House will vote for the Amendment.

6.58 p.m.

Sir Irving Albery: I beg to second the Amendment.
I had intended to deal with one or two amendments of the Company Law which I think are necessary, but as the hour is getting late I will just deal with two matters I want to bring before the House. The hon. and learned Member for Ash-ford (Mr. Spens) has referred to the uses and changes which have been brought about by limited liability. Undoubtedly when limited liability was originally introduced it was mainly, almost certainly, for the purpose of enabling a body of people collectively to get together money to undertake an enterprise which would probably have been too large for them otherwise. Since then custom in this matter has changed considerably. I have never been able to understand why a private limited company is permitted to be used for the many different purposes for which it is used. Limited liability has been referred to as a privilege. It enables those who employ it to evade certain heavy responsibilities. There is no doubt there are many uses for private limited liability, and most of the abuses we have been discussing this afternoon arise from private limited liability. It seems to me that we need to amend the law in that respect. It ought not to be possible for

anybody to make a private limited company for any improper purpose.
It seems to me that when you want to register a private limited liability company there should be some kind of standard and some kind of test to show that the company has a good and proper purpose in view, and the register should probably be periodically revised to discover whether this private limited company is still being conducted on proper and suitable lines. The hon. and learned Gentleman who moved this Amendment referred to the status which used to be enjoyed in this country, and still is to a more limited extent, by those who do business on their own full personal responsibility. It has always seemed to me to be a matter of great regret that no encouragement is ever given to people to trade privately on their own individual responsibility. All the encouragement is the other way. Almost every enterprise you might undertake is handicapped unless you register it as a private limited company; and I think that is a matter which needs very serious consideration. If some legislation could be framed to deal with that, almost at one stroke you would do away with a great many of the undesirable things which we have been discussing to-day.
Another thing to which I wish to draw attention is the constant and frequently improper use of the title of "bank" or "banking corporation." It has already been mentioned in the Debate that many bucket-shops in the City call themselves banks. There was the Bank of London—a high sounding title. The bank had a good address in the City of London, it advertised all over Europe, where the banking institutions of this country have a high reputation, and a great many people abroad were misled. Other fraudulent bucket-shops have used titles in which they employed the word "bank" or "banking corporation," and they have advertised widely and sent circulars all over the country and defrauded a great number of people. I have made some inquiries abroad and I find that in many countries there are limitations on the use of the word "bank." They are not always strictly legal limitations. In some countries you have to be a member of a chamber of commerce and your title has to conform to the kind of business that you are doing. That already is a considerable


safeguard. In Germany I believe they have actually got definite legislation. There you cannot use the word "bank" unless you have satisfied the authorities that you are the proper kind of person to use it. They have restrictions also in Sweden and Belgium.
I believe in the 1929 Act there are restrictions to prevent certain companies using the names "chamber of commerce" or "building society," and there are restrictions also on the use of the words "royal," "imperial," "municipal" and "chartered." In each case the use of those titles is subject to Board of Trade approval, and it is about time we had some legislation in this country which would make it necessary that some sanction should be obtained before firms or businesses can describe themselves as "banks" or "banking corporations." I do not think it would be at all difficult to do. I imagine that if every bank were registered the Board of Trade could delegate powers to different banking associations. I do not know that there are many such associations at present. I know there is one which includes the big five banks; another one includes the overseas banks, and I believe there is another which includes currency and money houses. Every firm which conducted a legitimate banking business could be an associate, and then such banking associations would be responsible for seeing that people who were not conducting the kind of business for which the associations were instituted were not admitted to their ranks.
I want to say a word or two about this suggested national investments board. I rather gather from the right hon. Gentleman the Member for Stirling (Mr. Johnston) that his idea is that the money collected by the national investments board would be for municipal loans, public utility services, and possibly one or two other forms of investment.

Mr. Johnston: State enterprises.

Sir I Albery: I can understand this suggestion being put forward as a means of bringing about a greater degree of State control, but I cannot understand how you can make that scheme work with reference to investments. The right hon. Gentleman particularly stipulated that the investor should not lose his capital, and that it should not depreciate;

he should get the same amount of money out as he put in. The money would be that kind of deposit which he could get out at three months' notice. If that board confines its investments to what one might call gilt-edged securities I do not see how it could give the private investor any better terms than he can get at present—

Mr. Johnston: I never suggested that he would get better terms. The small man plays for safety and security.

Sir I. Albery: That has already been fully given. If the investor is not to get better terms there are plenty of facilities for him already. The Post Office Savings Bank and National Savings Certificates have been mentioned, and there are several short-dated Government loans which you can still buy. I can understand the right hon. Gentleman putting this suggestion forward as a Socialist measure to collect capital and then use it for a public enterprise, but I cannot see how he is going to protect the private investor. Therefore, I can see no reason for supporting the Motion. There has been very general agreement in the Debate and would it not be possible to terminate it by accepting the Amendment and so strengthen the main portion of the Motion by avoiding a Division; otherwise the only course I can take is to support the Amendment moved by my hon. and learned Friend.

7.11 p.m.

Mr. Silverman: In view of the general unanimity on the main part of the Motion moved by my hon. Friend, I do not propose to say anything about that, except to express my agreement with what has been the general sense of the House, and I should like to devote my remarks to the Amendment. I find myself in considerable difficulty at the outset, because I cannot decide which of two mutually conflicting ideas the hon. and learned Member wishes to rely on. I found two currents running through his speech. One was the very definite assertion that this proposal for a national investments board was one to which he and his friends could never agree—that it divided fundamentally hon. Members on the benches opposite from hon. Members on this side of the House. But in the very next breath he said that, after all, there were the Post Office Savings Bank, the


Treasury, and a variety of other institutions already doing the same thing. In advancing those mutually destructive arguments, he is not doing justice to his usual lucid and brilliant advocacy of the causes that he supports. A national investments board is a very necessary part of the kind of safeguards which are envisaged by the Motion, with which nearly the whole House, including the Government, agree.
An hon. Member who spoke from the Liberal benches said it was not quite the province of Members on these benches to make proposals to perfect the capitalist system. This proposal is not designed to perfect the capitalist system. There is no such thing as a perfect capitalist system. A system that was perfect would not be capitalist; no capitalist system can be perfect; and the Motion was not designed to reconcile the irreconcilable. What the Motion is intended to do is to protect some of the victims of the capitalist system from some of its defects, and the whole point about the Motion is that small people—those for whom the company laws and the whole principle of limited liability were invented—can be swindled out of the whole of their savings without any breach of the law. The House is agreed that the law must be strengthened in order to make those things which are morally inadmissible legally inadmissible as well. It has been said with some force that whatever legal safeguard the Legislature may invent, the born shark will always get the born gull; and I suppose that a National Government is the very best instance of the eternal veracity of that statement. If that be so, is it not worth while to add to our safeguards and precautions something that is extra-legal, something that is beyond the criminal code or the commercial code?
Hon. Members opposite agree with us in part when we say that there ought to be, apart from chaotic, unrestricted, and uncontrolled speculative investment, another form of investment which is suitable for people who do not desire to take risks, who do not desire to get money for nothing, who do not desire large and unexpected profits from gambles at somebody else's expense, but who desire their savings to be at the disposal of the community for sound communal purposes and to show some modest but certain return to them. Despite the contention of the

hon. and learned. Member for Ashford (Mr. Spens) that there is a fundamental division of opinion on this matter, hon. Members opposite have agreed that in the Post Office Savings Bank and in other functions of the Treasury some sort of provision of this kind already exists.
But we say that it is not enough. We say that there will never be any safety or any health in the speculative side of the financial world until, side by side with uncontrolled and unrestricted speculative investment for private purposes, there exists some central pool in which the small man can safely put his savings and in which the unspent portion of the earned income of the community can be utilised by the State, for the State's own purposes. In the few minutes that remain, I do not intend to go into the details of this matter, but when hon. Members opposite say that they do not understand the proposal, surely they fail to understand it only because so far they have not provided themselves with the opportunity of sufficiently investigating it. In large parts of the world some principle of this sort applies.
The statement of the hon. Member who spoke from the Liberal benches that this proposal is Liberal in its origin is not true. I thought the hon. Member was a little pessimistic from the point of view of his own party when he apparently reconciled himself and his party to the unfortunate fate of Moses, who was permitted to see the promised land but not to enter it. The hon. Member's idea was that the Liberal party invented the proposal, that over seven years later it was taken over by another party, and that 15 years after that, it would be embodied, in an emasculated form, in some legislation passed by the National Government. If that be so, it would seem that hon. Members of the Liberal party will have no lot or share in the passage of that legislation, and that the triumph of Liberal ideas will be in inverse proportion to their representation in the House. The truth is that this idea arises inevitably out of the obvious failings and difficulties in which uncontrolled finance lands a capitalist community. Until the House and the community reconcile themselves to the duty and necessity of controlling the unspent portion of the community's earnings in the interest of the future activities of the community, as well as of the


owners of those earnings, we shall have periodic Debates of this kind and periodic re-enactments or reforms of the criminal law in order to capture sharks.

7.20 p.m.

Mr. A. V. Alexander: It is unfortunate that there cannot be a longer Debate in reply to the Mover and Seconder of the Amendment, which seeks to omit from the Motion of my hon. Friend the Member for Bassetlaw (Mr. Bellenger) the provision concerning the national investments board. I was very interested by the quiet and well-reasoned argument of the hon. Member for Gravesend (Sir I. Albery). In the Standing Committee which considered the Companies Bill in 1929, I always found the hon. Member a sure and firm supporter of good reform of company law; but with great respect to him, I maintain that some of the alternatives which he suggested for the small investor are not good enough, since they are subject to all sorts of special restrictions, such as days of notice and special limitations upon the amount to be put in, which need not operate if there were a centrally controlled national investments board which, under a competent Government Department, would direct investments to those fields most necessary in the national interest. The hon. Member did not quite understand another function which we have in mind with regard to the national investments board. I do not want again to go over the ground concerning investments in Government and publicly-owned securities, but to deal with the general question of safeguarding the investing public in regard to industrial investments.
Members of the Labour party, in taking up this matter, have never hidden the fact that there are those in the small investors' class who do not always want to rest solely upon the very low fixed rate of interest on Government securities; but surely that is no reason why they should always be open to very gross exploitation and fraud by those who hide behind the Companies Act. One of the functions which we want to have attached to the national investments board is an advisory function, and the power to license, if necessary, the time of issue. It would have the function of deciding whether there should be an issue of the kind contemplated. As was said by my right hon. Friend, who has made a study of this

matter and who published a book upon it in 1934, there are heaps of cases where the small investor is defrauded on account of the fact that immediately a particular class of operations or production begins to show a profit, it is flooded with new issues and attempts to exploit it unduly. It would be one of the functions of the national investments board, by the licensing of issues, to prevent overcapitalisation by new issues in that particular group, and that would represent a very great safeguard for the investor. I talked this matter over with a very prominent leader of the Stock Exchange in 1929, when I was leading the Opposition on the 1929 Bill. I have not the slightest hesitation in saying that many of those who have a very onerous task at present in connection with Stock Exchange transactions, and who have tried to put some check upon the shady practices that go on, would welcome some aspects of the national investments board, in order to prevent frauds.
I am sorry that the hon. Member who moved the Amendment disturbed the general harmony of the House concerning the main object. I listened with very great interest to the reply of the Parliamentary Secretary to the Board of Trade. While welcoming the announcement that there is to be introduced legislation of an important character to deal with the prevention of share-pushing and one or two of the ancillary matters concerning that group of operations under the Companies Act, may I say that I am exceedingly disappointed, as I am sure my hon. Friend the Member for Bassetlaw is, by the Parliamentary Secretary's general announcement with regard to company law? The suggestion that we cannot proceed to amend the company law without another prolonged inquiry seems to me to be ridiculous. We spent four months in the Standing Committee on the 1929 Bill, which contained 400 Clauses designed to implement the recommendations of the Greene Committee of 1926. It is because the President of the Board of Trade and the Government of that time would not implement all the recommendations of the Greene Committee and rejected many elementary safeguards which were obviously required, that so many subsequent difficulties have arisen. I maintain that with the experience of the companies department of the Board of


Trade since 1929, with the report of the Greene Committee, and with the cases since 1929, the Government have all that is needed at the present time to proceed with the drafting of a new Companies Bill to amend the Companies Act. If the Parliamentary Secretary thinks that we shall be satisfied with the promise that we shall get a Bill in four, five, or six years' time, he is mistaken. I believe that that is a fundamentally wrong view of the situation. Nor is it enough to say that the most urgent question is share-pushing. What about all the other frauds that take place under the Companies Acts? What about the Royal Mail Steamship business?

Mr. Speaker: I must remind the right hon. Gentleman of the necessity of keeping to the subject matter of the Amendment, which is that of a national investments board.

Mr. Alexander: It is not easy to keep within the Rules of the House in dealing with an Amendmenet of this sort, and I am obliged to you. Sir, for reminding me that I must do so. My hon. Friends cannot be wholly satisfied with the reply of the Government. With regard to the Amendment on the Paper concerning in-

dustrial and provident societies, which has not been moved, I would point out to the hon. Member for Southampton (Mr. Craven-Ellis) that, although he was not in the House at the time, if Members of his party had been willing to support the Bill introduced in 1929 by my hon. Friend the Member for East Ham, South (Mr. Barnes), we should not have had nearly as many of the frauds and sharp practices under the Industrial and Provident Societies Acts that we are having to-day. In spite of his speech, I hope that the hon. and learned Member for Ashford (Mr. Spens), having listened to what our real views are concerning the national investments board, will withdraw his Amendment, and enable the House to be unanimous on this subject.

Amendment agreed to.

7.28 p.m.

Mr. Assheton: I beg formally to move, in line 4, to leave out from "Acts," to the end of the Question, and to add instead thereof "for this purpose."

Question put, "That the words proposed to be left out stand part of the Question, as amended."

The House divided: Ayes, 125; Noes, 186.

Division No. 62.]
AYES.
[7.30 p.m.


Acland, R. T. D. (Barnstaple)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Maxton, J.


Adams, D. M. (Poplar, S.)
Griffiths, J. (Llanelly)
Messer, F.


Adamson, W. M.
Groves, T. E.
Montague, F.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hall, G. H. (Aberdare)
Morrison, Rt. Hon. H. (Hackney, S.)


Ammon, C. G.
Hall, J. H. (Whitechapel)
Morrison, R. C. (Tottenham, N.)


Anderson, F. (Whitehaven)
Hardie, Agnes
Muff, G.


Attlee, Rt. Hon. C. R.
Harris, Sir P. A.
Naylor, T. E.


Banfield, J. W.
Harvey, T. E. (Eng. Univ's.)
Noel-Baker, P. J.


Barnes, A. J.
Hayday, A.
Oliver, G. H.


Barr, J.
Henderson, A. (Kingswinford)
Paling, W.


Benson, G.
Henderson, J. (Ardwick)
Parker, J.


Bevan, A.
Henderson, T. (Tradeston)
Pethick-Lawrence, Rt. Hon. F. W.


Bromfield, W.
Hills, A. (Pontefract)
Price, M. P.


Brown, C. (Mansfield)
Holdsworth, H.
Quibell, D. J. K.


Brown, Rt. Hon. J. (S. Ayrshire)
Hollins, A.
Richards, R. (Wrexham)


Buchanan, G.
Jagger, J.
Ridley, G.


Burke, W. A.
Jenkins, A. (Pontypool)
Riley, B.


Cape, T.
Johnston, Rt. Hon. T.
Ritson, J.


Charleton, H. C.
Jones, A. C. (Shipley)
Roberts, Rt. Hon. F. O. (W. Brom.)


Cluse, W. S.
Kennedy, Rt. Hon. T.
Robinson, W. A. (St. Helens)


Clynes, Rt. Hon. J. R.
Kirkwood, D.
Sanders, W. S.


Cocks, F. S.
Lathan, G.
Sexton, T. M.


Cove, W. G.
Lawson, J. J.
Short, A.


Cripps, Hon. Sir Stafford
Leach, W.
Silverman, S. S.


Davies, R. J. (Westhoughton)
Lee, F.
Simpson, F. B.


Davies, S. O. (Merthyr)
Leslie, J. R.
Smith, Ben (Rotherhithe)


Dunn, E. (Rother Valley)
Logan, D. G.
Smith, E. (Stoke)


Ede, J. C.
Lunn, W.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Edwards, A. (Middlesbrough E.)
Macdonald, G. (Ince)
Sorensen, R. W.


Edwards, Sir C. (Bedwellty)
McEntee, V. La T.
Stephen, C.


Evans, D. O. (Cardigan)
McGhee, H. G.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Fletcher, Lt.-Comdr. R. T. H.
McGovern, J.
Strauss, G. R. (Lambeth, N.)


Frankel, D.
MacLaren, A.
Taylor, R. J. (Morpeth)


Gardner, B. W.
Maclean, N.
Thorne, W.


Garro Jones, G. M.
MacNeill Weir, L.
Thurtle, E.


George, Major G. Lloyd (Pembroke)
Mainwaring, W. H.
Tinker, J. J.


Grenfell, D. R.
Mathers, G.
Walkden, A. G.




Walker, J.
Whiteley, W. (Blaydon)
Woods, G. S. (Finsbury)


Watkins, F. C.
Wilkinson, Ellen
Young, Sir R. (Newton)


Watson, W. McL.
Williams, E. J. (Ogmore)



Wedgwood, Rt. Hon. J. C.
Williams, T. (Don Valley)
TELLERS FOR THE AYES.—


Welsh, J. C.
Wilson, C. H. (Attercliffe)
Mr. Bellender and Major Milner.


Westwood, J.
Windsor, W. (Hull, C.)





NOES.


Acland-Troyte, Lt.-Col. G. J.
Grant-Ferris, R.
Pilkington, R.


Allen, Lt.-Col. Sir W. J. (Armagh)
Greene, W. P. C. (Worcester)
Porritt, R. W.


Aske, Sir R. W.
Gridley, Sir A. B.
Procter, Major H. A.


Assheton, R.
Grimston, R. V.
Radford, E. A.


Atholl, Duchess of
Guest, Lieut.-Colonel H. (Drake)
Rankin, Sir R.


Balfour, G. (Hampstead)
Guest, Maj. Hon. O. (C'mb'rw'll, N. W.)
Rathbone, J. R. (Bodmin)


Balfour, Capt. H. H. (Isle of Thanot)
Guinness, T. L. E. B
Rawson, Sir Cooper


Balniel, Lord
Hannon. Sir P. J. H.
Rayner, Major R. H.


Birchall, Sir J. D.
Harbord, A.
Reid, Sir D. D. (Down)


Blair, Sir R.
Haslam, Sir J. (Bolton)
Reid, W. Allan (Derby)


Bossom, A. C.
Heilgers, Captain F. F. A.
Robinson, J R. (Blackpool)


Briscoe, Capt. R. G.
Hely-Hutchinson, M. R.
Ropner, Colonel L.


Brocklebank, Sir Edmund
Heneage, Lieut.-Colonel A. P.
Ross, Major Sir R. D. (Londonderry)


Brown, Col. D. C. (Hexham)
Hepworth, J.
Ross Taylor, W. (Woodbridge)


Brown, Brig.-Gen. H. C. (Newbury)
Herbert, Major J. A. (Monmouth)
Rowlands, G.


Bull, B. B.
Higgs, W. F.
Royds, Admiral P. M. R.


Butcher, H. W.
Hills, Major Rt. Hon. J. W. (Ripon)
Ruggles-Brise, Colonel Sir E. A.


Carver, Major W. H.
Hoare, Rt. Hon. Sir S.
Russell, Sir Alexander


Cazalet, Capt. V. A. (Chippenham)
Holmes, J. S.
Russell, R. J. (Eddisbury)


Channon, H.
Hope, Captain Hon. A. O. J.
Salt, E. W.


Christie, J. A.
Horsbrugh, Florence
Samuel, M. R. A.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Hudson, Capt. A. U. M. (Hack., N.)
Sanderson, Sir F. B.


Clarry, Sir Reginald
Hudson, R. S. (Southport)
Savery, Sir Servington


Cobb, Captain E. C. (Preston)
Hume, Sir G. H.
Selley, H. R.


Colville, Lt.-Col. Rt. Hon. D. J.
Hunter, T.
Smiles, Lieut.-Colonel Sir W. D.


Conant, Captain R. J. E.
Hutchinson, G. C.
Smith, L. W. (Hallam)


Cook, Sir T. R. A. M. (Norfolk N.)
James, Wing-Commander A. W. H.
Smith, Sir R. W. (Aberdeen)


Cooke, J. D. (Hammersmith, S.)
Jones, L. (Swansea W.)
Somervell, Sir D. B. (Crewe)


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Keyes, Admiral of the Fleet Sir R.
Somerville, A. A. (Windsor)


Craven-Ellis, W.
Lamb, Sir J. Q.
Spears, Brigadier-General E L.


Croft, Brig.-Gen. Sir H. Page
Law, Sir A. J. (High Peak)
Stewart, J. Henderson (Fife, E.)


Crookshank, Capt. H. F. C.
Lees-Jones, J.
Strauss, H. G. (Norwich)


Cross, R. H.
Levy, T.
Strickland, Captain W. F.


Crossley, A. C.
Lindsay, K. M.
Stuart, Lord C. Crichton- (N'thw'h)


Culverwell, C. T.
Lloyd, G. W.
Stuart, Hon. J. (Moray and Nairn)


Davies, Major Sir G. F. (Yeovil)
Locker-Lampson, Comdr. O. S.
Sueter, Rear-Admiral Sir M. F.


De Chair, S. S.
Loftus, P. C.
Tasker, Sir R. I.


De la Bère, R.
MacAndrew, Colonel Sir C. G.
Taylor, Vice-Adm. E. A. (Padd., S.)


Denville, Alfred
MacDonald, Sir Murdoch (Inverness)
Thomas, J. P. L.


Dodd, J. S.
Macdonald, Capt. P. (Isle of Wight)
Touche, G. C.


Doland, G. F.
McEwen, Capt. J. H. F.
Train, Sir J.


Donner, P. W.
McKie, J. H.
Tree, A. R. L. F.


Drewe, C.
Macquisten, F. A.
Tufnell, Lieut.-Commander R. L.


Duckworth, Arthur (Shrewsbury)
Magnay, T.
Wallace, Capt. Rt. Hon. Evan


Dugdale, Captain T. L.
Makins, Brig.-Gen. E.
Ward, Lieut.-Col. Sir A. L. (Hull)


Duncan, J. A. L.
Manningham-Buller, Sir M.
Ward, Irene M. B. (Wallsend)


Dunglass, Lord
Margesson, Capt. Rt. Hon. H. D. R.
Wardlaw-Milne, Sir J. S.


Eastwood, J. F.
Markham, S. F.
Waterhouse, Captain C.


Eckersley, P. T.
Mayhew, Lt.-Col, J.
Watt, Major G. S. Harvie


Edmondson, Major Sir J.
Mellor, Sir J. S. P. (Tamworth)
Wayland, Sir W. A


Elliot, Rt. Hon. W. E.
Mills, Major J. D. (New Forest)
Wedderburn, H. J. S.


Ellis, Sir G.
Moore, Lieut.-Col. Sir T. C. R.
Whiteley, Major J. P. (Buckingham)


Elliston, Capt. G. S.
Moreing, A. C.
Williams, H. G. (Croydon, S.)


Elmley, Viscount
Morrison, G. A. (Scottish Univ's.)
Willoughby de Eresby, Lord


Emery. J. F.
Munro, P.
Windsor-Clive, Lieut.-Colonel G.


Emmott, C. E. G. C.
Nall, Sir J.
Winterton, Rt. Hon. Earl


Emrys-Evans, P. V.
Nicolson, Hon. H. G.
Withers, Sir J. J.


Fildes, Sir H.
O'Connor, Sir Terence J.
Womersley, Sir W. J.


Fleming, E. L.
O'Neill, Rt. Hon. Sir Hugh
Wright, Wing-Commander J. A. C.


Furness, S. N.
Orr-Ewing, I. L.
Young, A. S. L. (Partick)


Gibson, Sir C. G. (Pudsey and Otley)
Peake, O.



Gluckstein, L. H.
Petherick, M.
TELLERS FOR THE NOES.—


Gower, Sir R. V
Pickthorn, K. W. M.
Mr. Spens and Sir Irving




Albery.


Main Question, as amended, put, and agreed to.

Proposed words there added.

Resolved,
That this House, being of the opinion that further provision should be made to

protect the public from widespread evils resulting from fraudulent and unscrupulous business and financial operations, calls for the early introduction of legislation to strengthen the law and to amend the Companies Acts for this purpose."—

CIVIL AND POLITICAL LIBERTY.

7.40 p.m.

Mr. G. Strauss: I beg to move,
That this House views with alarm the extent to which the liberty of the subject has suffered encroachment within recent years, and records its opinion that such encroachment threatens the maintenance and impedes the development of a healthy democracy.
I must apologise to the House for the noise which up to yesterday was my voice, but I assure hon. Members that I shall not inflict it on them longer than I can help. Throughout the world to-day, democratic institutions are being threatened and some have been destroyed—we hope only temporarily. Everyone in this House must deplore the reactionary process that is going on, but it would be stupid and hypocritical to deplore the inroads which are being made into democratic institutions in other countries, unless we were prepared to examine those inroads which have taken place in this country, and take the necessary steps to stop that process from going any further. I propose to show not only that this tendency exists in Great Britain, but that it has, in recent years, progressed to an alarming extent. It is my object to deal with one aspect only of this very wide subject. That is political liberty, and particularly the traditional liberty of the British people to express their grievances; the liberty of free speech, of criticism against existing institutions and of agitating, organising and demonstrating against what they conceive to be social injustice. That liberty, I maintain, has been seriously interfered with during recent years by Parliament, by the judiciary and by the police—particularly by the police.
Let us consider Parliament's responsibility. Since the War, Parliament has passed a number of Measures which, in varying degree, have interfered with the political rights and liberties of the subject. In 1920 there was the Emergency Powers Act; in 1927, the Trade Disputes Act; in 1934, the Incitement to Disaffection Act, and in 1936, the Public Order Act, some Sections of which, in my view, are thoroughly dangerous. In this connection one must also mention the Unemployment Insurance Act, 1934, because it took out of the hands of elected and removable public representatives the welfare of a large section of the

poorest people of the country. The vast social question of the care of those people was deliberately removed from the realm of democratic decision. Those Measures are, I suggest, significant, and it is foolish to minimise their danger by thinking that, so far, they have not been rigorously applied. The essential point is that Parliament in those five Acts has given the Executive such powers of repression as would enable it, without further legislation, to lay the foundations of a Fascist State.
The attention of hon. Members should be drawn to one serious feature of this recent legislation. When these Bills have been before Parliament, we have been told by the Minister in charge that the provisions are meant to apply only to really serious acts of an anti-social nature. The Minister's soft words usually gull an unsuspecting House into acquiescence, but once the Act is on the Statute Book and beyond the control of the Minister and the House, it is often put to such uses as would shock—and in some cases, has, in fact, shocked—the Members of this House who voted for it. For example, how many Members when they were passing the Incitement to Disaffection Act dreamt that it would result in a student of 18, a boy of exemplary character, being sentenced to 12 months in prison because of a ridiculous and foolish letter sent to a corporal in the Army? It is true that as a result of public indignation that sentence was later reduced. The point is that this House should never have passed an Act that permitted such an outrage on justice to take place. Again, I am sure that the attitude of many of my hon. Friends on this side of the House towards the Public Order Act might have been very different if they had realised that immediately it was passed it would be used in Harworth to arrest miners and to help to break the strike there.
Probably the most serious development in regard to this restriction of our civil liberties has been the growing tendency of the police, and particularly of the police in London, to interfere autocratically and sometimes brutally in the public right of free speech. A little time ago there was an arbitrary embargo placed by the Commissioner of Police on the holding of any outdoor meetings within a radius of half a mile of any Employment Exchange. Anybody who dared to exercise their right of holding such a public meeting immediately


found himself arrested for obstructing the highway, or for endangering the peace, or possibly for obstructing the police in the discharge of their duty. No evidence was necessary or required to prove that there was any obstruction of the highway or any likelihood of breaches of the peace. The ipse dixit of the policeman was all that was necessary to prevent meetings taking place in a large section of London. This procedure was upheld in the courts of law, and I have little doubt that it will be used in future in trade or political disputes in order to muzzle the speeches of workers' representatives when they are trying to air their grievances or desiring to arouse discontent against social injustices.
Recently the question of free speech has been complicated by the establishment of the Fascist movement. It is one of the main purposes of that movement to stir up racial hatred by such provocative behaviour as to create breaches of the peace. Every decent person in the community would like to see an end put to that type of conduct, but it would be doing a poor service to democracy if, on the pretext of stopping the Fascist violence, we permitted the police to destroy the long established democratic rights of our people and prevented the people as a whole from exercising their traditional liberties. That, however, is exactly what has been happening, and whatever may have been said in the past by Home Secretaries in this House, there is overwhelming evidence to prove that the police have over and over again refused to interfere against Fascist terrorism, and have acted with merciless severity against working men and women who have exercised their citizen's right of public speech in criticism of the Fascist movement.
What is even perhaps more serious is that the behaviour of the police has invariably been condoned and supported by the Home Secretary in the House of Commons. There is no need for me to remind the Under-Secretary of the fracas at Olympia, because he was one of those who courageously made a public protest in the Press at the time against the violence that was used on that occasion by the Fascist stewards. The police refused to interfere, in spite of the fact that it was evident that great violence was being used on members of the public.
The Home Secretary of that time supported the police in their refusal to enter the precincts of Olympia, although they knew that violence was being done, on the ground that the police had no right to enter a public meeting unless they were invited to do so by the conveners.
I would like to contrast what happened on that occasion with a meeting that took place in the Autumn of the same year in Glamorgan. A public meeting was called by the Communist party to protest against certain political occurrences that had taken place. The police inspector of that district insisted on going to the meeting. He was asked by the chairman to leave, but he refused, and eventually the matter was brought to the High Court, where the decision was announced that the police had not only a right but, I believe they said, a duty to enter any premises where a meeting was taking place and where they thought a breach of the peace might ensue. The action of the police on that occasion is in marked contrast to the action of the police at Olympia. Subsequently, after this judgment had been made, there was a Fascist meeting in Hornsey Town Hall on 25th January, 1937, where members of the public were treated with violence by the Fascist stewards and thrown out on to the steps. They asked the police to intervene and to go into the meeting to stop any further violence and to take the names and addresses of those responsible for the violence. Again the police refused to intervene, in spite of repeated requests made by the various members of the public who had been violently assaulted. Although protests were made on that occasion to the Home Secretary, no action was taken.
There is little wonder, in view of this and similar actions, which can be multiplied tenfold, that the police in London are rapidly losing public confidence in their impartiality. Indeed, in the East End, where Fascist provocations have been worst, there is a general conviction that the police are there primarily to help the Fascists. There is a growing conviction to that effect.

Mr. Thurtle: Where is it to be found?

Mr. Strauss: If the hon. Gentleman wants evidence of that I will give various examples in a moment of the action of the police towards members of the working class who have done nothing serious.


who did not threaten a breach of the peace, and were treated with considerable severity by the police. On every occasion when a Fascist meeting has taken place in the open air the police have acted exactly as if they were appointed stewards of the meeting by the Fascist conveners. May I give some examples of the manner in which the police have interfered with the rights of members of the public to heckle at open air meetings and to make such peaceful interruptions as they think proper? That is a right which every Member of the House would like to see preserved almost as much as the right of free speech. At Stepney Green on 14th January, a Fascist meeting was held. The most violently anti-Semitic abuse came from the speakers. The audience was naturally largely a Jewish audience. A number of people who had asked questions were arrested. One man who had gone to the meeting whistled, and the police arrested him under the Public Order Act. The magistrate was rightly severe on the action of the police, and said:
It would be a sad state of affairs if it were a criminal offence for some irresponsible young man to put his fingers to his mouth and whistle.
Another man was arrested because he violently blew his nose at the meeting. Of course, that summons was dismissed by the magistrate. At a perfectly peaceful meeting held 100 yards away by the ex-service men's movement, a truncheon charge took place and the meeting was broken up without any warning to the organisers being given. We have had instances over and over again where the most filthy language and the most vile abuse has been used by Fascist speakers, and no action has been taken by the police. I admit that in some cases action has been taken, but usually it is not taken. On the other hand people who, for example, in a procession shouted out, "Give us bread," were arrested by the police and charged before the magistrate. On another occasion a newspaper seller who shouted out the words printed on his newspaper placard, "Andre executed by Nazis," was arrested for behaviour likely to cause a breach of the peace.
I want to make reference to the meeting at Thurloe Square in March, 1936, which was broken up by the police. I do not want to go into it in detail because it has been before the House on a previous

occasion. I only want to remind the House that it was a meeting held to protest against the Fascists on the occasion of a Fascist meeting in the Albert Hall. The police put a ban on any public meetings taking place within half a mile radius of the Albert Hall. It has been asserted, but I do not know whether it has been proved, that the meeting in Thurloe Square was actually outside that radius. The action of the police in breaking up that meeting was investigated by a commitee set up by the Council of Civil Liberties, a body for which every person who appreciates and desires to preserve our civil liberties should be grateful. This committee of inquiry, which was set up when the Government refused to institute an inquiry, comprised people of such eminence as Professor Norman Bentwich, Mr. Harrison Barrow, Professor F. M. Corn-ford, Mr. J. B. Priestley and the hon. Member for the English Universities (Miss Rathbone). As the result of making inquiries from a large number of witnesses, this committee came to the following conclusions:
That from the time when the meeting started in Thurloe Square the crowd was perfectly peaceable and orderly.
That no attempt was made by the police to get the speakers to stop the meeting, although the police would have had no difficulty in approaching the speakers.
That there was no necessity whatever for a baton charge, that the baton charge was carried out with a totally unnecessary degree of brutality and violence, that serious injuries were caused, and that fatal injuries might have been caused.
That the crowd offered no resistance to the police.
That a serious riot might easily have been caused by the action of the police, for which the police would have been solely to blame.
That the facts call for an official public inquiry into the conduct of the police.
In spite of that very strong evidence, the Home Secretary refused to take any action in the matter, and by that refusal must either be taken to endorse or condone the action taken by the police, or to say definitely that he is not prepared to defend the public against such an abuse of police powers. While I am on this subject I would like to say a word about a further growing abuse of the power of the police in the use of the truncheon. According to the police code:
Truncheons are supplied to the police to enable them to protect themselves if violently attacked. … the use of the truncheons must


not be resorted to except in extreme cases, when all other attempts have failed, and a prisoner is likely to escape, or be rescued, through the constable being ill-used and overpowered.
We have had large numbers of cases where the police have used their truncheons as frequently as they used to use their whistles in the past when they have not been endangered, but merely when they desired to break up a meeting of which they did not approve, although it may have been a peaceful meeting and the chairman and convenors were never warned of the action the police were going to take. I think that if the Home Secretary were wise he would be extremely worried today about the disrepute into which the London police in general are falling. The old type of constable, the friend of the ordinary citizen, the man who earned the respect not only of distinguished foreign visitors but of every decent Londoner is gradually disappearing. The jovial, helpful "Bobby" of the past is giving way to a cold hostile official. The militarisation of the police is becoming increasingly evident, and no one resents this more than the decent element in the police force. As a Londoner I deeply regret this change which is taking place, and I warn the Home Secretary that if he allows it to go too far he will find one day that there has been created such antagonism between the police and the public as may lead to a really dangerous situation.
One word about the extended ban in the East End which was announced by the Home Secretary on Monday. What is the position there? There is only one organisation in the East End which has in recent years caused any breach of the peace, and that is the Fascist organisation. Their demonstrations have caused such breaches, as they are bound to do, because they are deliberately provocative. No other demonstration has caused any breach, whether Labour or Communist demonstration. If it were impossible by any other means except by applying this general ban to stop Fascist demonstrations I would say perhaps we must apply such a general ban, but that simply is not the case. The police in the past have frequently taken powers to stop demonstrations which they believed were likely to result in violence. When the unemployed were going to demonstrate in London in 1932 the police arrested Tom Mann and

asked him to enter into recognisances that he would not cause breaches of the peace. This applied to his followers, as he was not the only one arrested. The police took that step on that occasion to prevent a possible breach of the peace by a demonstration in London. On other occasions they have laid down which route a demonstration should take. They have full powers to do that. They have full powers to say that a procession in a certain area is likely to be dangerous for traffic or other reasons, and insist that the demonstration should entirely avoid that area. They could have taken that line in regard to Fascist processions in the East End of London if they had wanted to do so, but the Home Secretary has put a ban on all political demonstrations.
Speaking in this matter for myself, I think that is a real infringement of the general rights and liberties of the public. It seems to me to be analogous to action by the police in an area where at night time perhaps a large number of burglaries had taken place and where the police would say, "In that area all citizens, good or bad, must be within their houses, or must not be in the streets, after a certain time." There is a small section of the community that is out to create breaches of the peace and bring about acts of violence. The Government should deal with that section and not impose a general ban on the liberties of the public as a whole.
In conclusion, I want to say one word about the Amendment on the Paper. The Amendment states in effect that only such restrictions of civil liberties should be imposed as are necessary for the maintenance of law and order. That sounds all right, but what in effect does it mean? Fortunately we are not here in the realm of speculation. We know from bitter experience the lengths to which the Conservative party is prepared to go in restricting liberties, the excesses they are prepared to commit in the defence of this phrase "law and order." The Amritsar massacre was in defence of "law and order." The murders and desecrations of the Black and Tans in Ireland were all perpetrated in defence of "law and order." Now we are told that they are still prepared to restrict public liberties as far as they consider necessary in defence of law and order. We thank them for the warning which


they give us, but they do not expect us to accept their interpretation of liberty, if their interpretation is such as stands in this Resolution. In fact I challenge them to deny that what their Amendment really means is that they are prepared, if necessary, to extinguish all democratic rights and liberties in order to preserve the present social system. They can hardly expect us to agree with such an outrageous statement of principle.
We believe that the rights and liberties which we enjoy to-day have only been won after centuries of struggle and sacrifice. Those struggles and sacrifices have been almost entirely on the part of the working men and women of this country. We feel it is our duty to past as well as to future generations to see that those rights and liberties are not torn from us or gradually whittled away.

8.7 p.m.

Mr. MacNeill Weir: I beg to second the Motion brought forward with such eloquence and ability by the hon. Member for Lambeth North (Mr. G. Strauss). The other day I was in the Library when I came across a book, "Macaulay's Speeches," and I was interested to note what his maiden speech in the House of Commons was. On 5th April, 1830, Mr. Macaulay, afterwards Lord Macaulay, made his maiden speech in this House. It was to second a Motion by a Mr. Grant for leave to bring in a Bill to repeal several disabilities affecting British-born subjects professing the Jewish religion. One hundred years have gone since then, and we find that the Jews in London as well as in Fascist countries are still suffering disabilities. In 1800 we had the Combination Acts which curtailed the liberties of the working classes to organise in trade unions. These Acts were passed by this House of Commons. They were repealed afterwards, and we thought that we had won the right of combination by workers.
Later on in this Debate I am sure some hon. Friends of mine will tell of the Harworth collieries and how there was an attempt there to prevent men joining the union that they wished to join. That will be dealt with by hon. Members who know more about it than I do and who have been intimately connected with it, but I wish to refer to a case in Scotland. There, on 29th October last, a young man named Ian Macpherson, a clerk in the Union Bank of Scotland, was dismissed from his

occupation. There had been a strike, which was called off at the last moment. This young man was an executive of the Bankers' Association. He was dismissed. The officials of the Bank Officers' Guild met to discuss the question. The question is still being discussed. They came to the conclusion that something must be done nationally for this man. The fact is that there was a clear case of victimisation because of the trade union activities of this young man.
On 25th November, 1644, there was published a most popular, a most eloquent, if not the greatest of all of Milton's prose works, the "Areopagitica." That was a defence of the liberty of unlicensed printing. It was in the form of a speech to Parliament. It was published deliberately, unregistered, and unlicensed, and it attacked the whole system of licensing and public censorship. I have in my hand a letter written to the "Times" just a few months ago. I will read not the whole letter—it is a long one—but sufficient to let the House get the gist of it. This is the effect:
In view of the increasing number of actions brought against authors and publishers, we submit that the time has come for drastic reforms in the law relating to literary libel. Under existing conditions many of the great classics of the past could not have been published without grave risk of suppression. Sine it is mainly authors of repute who are endeavouring to give credible pictures of contemporary life whose work is in jeopardy, a serious threat to the quality of English literature obviously exists, and the freedom of expression of reputable authors is limited by a fear of flimsy or malicious charges against which they are virtually unprotected. At present the law is so heavily weighted against authors that it is substantially true to say that they can make no effective defence to charges and claims made against them in respect of published works. By no means the only difficulty, although a very common one, arises when the plaintiff alleges that a description in a book of some purely fictional character constitutes a libel on himself. To make out a case he has only to procure a witness or two to swear that they recognise the character in question as himself. The witnesses may be ignorant, misinformed, malicious, or even parties or thinly disguised competitors, but their evidence will suffice to throw upon the author and publisher the whole cost of proving that the character cannot reasonably be identified with the plaintiff.
That is a case of unconscious libel, and the House can see how far such a matter could be carried. Not the least danger to free speech is the turn taken in recent years by the law of libel. The Annual


Conference of the Law Society has condemned it. The National Union of Journalists draw attention to the danger. I would point out that in a recent notorious libel case the defendent was compelled to settle where his avowed and undeniable intention was to refute the very libels of which he was accused. The House will realise the seriousness of the position. I do not think it was improved by a suggestion on that occasion from the eminent judge who presided over the case that the proper punishment for the defendent was an effective horsewhipping. When the Lord Chief Justice uses language of that kind—

Mr. Deputy-Speaker (Captain Bourne): The hon. Member must only criticise the Lord Chief Justice in a Motion brought before the House.

Mr. Weir: I was trying to differentiate between the Lord Chief Justice as Lord Chief Justice speaking ex cathedra—

Mr. Deputy-Speaker: That is exactly what the hon. Member cannot do.

Mr. Weir: I bow, of course, to your Ruling. I was only going to say that the last judge who inflicted such a sentence was Lord Chancellor Jeffreys. Another curtailment of liberty arises from what might be called the political libel. Let any author set out to write a history and narrative of contemporary politics. Suppose he is a Member on this side of the House who believes that the National Government was, perhaps, the greatest frame-up since the Pigott letters. Suppose he believes that and writes a book to prove it. He cannot do it without criticising some well-known figures, and he will find before long that he has set out on a very difficult and perilous adventure. He will find that the Official Secrets Acts will be cited against him, that the law of libel will be used against him in every possible way. He will be threatened, he will be blackmailed, and his publisher will be intimidated. [An HON. MEMBER: "Ramsay MacDonald is dead."] It would be impossible, in dealing with a subject like that, to refer only to one person. The National Government was formed by a conspiracy of several people, a conspiracy which led to the coup d'état which followed.
There is one other aspect of this question which was referred to by my

hon. Friend, and that is the Official Secrets Act. That Act—I hope I shall be on safe ground now—was piloted through this House by Sir Gordon Hewart. He assured the House at the time that it had no nefarious purpose, that no hidden meaning was behind it, that it was a plain, straightforward Measure which would deal with spying and things like that. I have in my hand the note of a case given to me by the National Union of Journalists. Mr. E. D. G. Lewis, a journalist, of Stockport, was summoned and fined £5 for unlawfully failing to give on demand to a police officer information in his possession relating to a suspected offence under Section 2 of the Official Secrets Act, 1911, contrary to Section 6 of the Official Secrets Act, 1920. The prosecution stated that an article in the "Daily Dispatch" written by Mr. Lewis gave information which had been contained in a confidential police circular, and that there was grave reason to suppose that it had been supplied by a police officer contrary to the Official Secrets Act, 1911.

Mr. Pickthorn: I am sorry to interrupt the hon. Member, but I should like to ask one question.

Mr. Ellis Smith: And we saw who inspired it.

Mr. Pickthorn: The hon. Member can see what he chooses. Is it not true that this case is at the moment sub judice?

Mr. Weir: I do not think it is. The defendent was fined £5. The circular contained a description of a man wanted for fraudulent conversion and details of his methods of working. Mr. Lewis had refused to give the source of the information—no one can blame him for that—when asked to do so by the police. The police circular in question was not marked "Confidential," and in reply to a question by defending counsel the deputy chief constable of Southport, the town from which the circular emanated, stated that he could not say that in no place had the circular been placed on police notice boards, although he would be surprised if it had. If this sort of thing is allowed to go on, the work of a journalist becomes impossible.
My hon. Friend has referred to police prejudice and police bias against those who hold what he called "Left" views. I would refer to the notorious case of


Mrs. Urquhart. She was arrested for causing obstruction by selling the "Daily Worker" outside Golder's Green Station. She was taken to the police station and searched in a most indecent way, and was tried before the Middlesex petty sessions. Two police constables gave absolutely contradictory evidence; there were five points on which there was difference between the two men. The evidence was so grotesquely false that the Bench dismissed the case without calling on counsel for the defence. That case had a sequel. Two days afterwards the defendant's solicitor wrote to the Commissioner of Police calling attention to the case and to the extremely unpleasant treatment that his client had received at the police station. He suggested an investigation. The Police Commissioner replied that he was satisfied that the action of the police had been correct throughout. The solicitor wrote again, and the reply that he got is one which we sometimes hear in this House. It was that the Commissioner had nothing to add to what he had previously said.
When the solicitor wrote asking for the name of the matron who had searched this woman, and intimated that he intended to take legal proceedings, there was a complete climb down by the Commissioner, who wrote to say that, after further investigation, he agreed that the arrest had been unnecessary and quite unjustified. He tendered his apologies and paid £50 as agreed indemnity for costs. Mrs. Urquhart accepted the settlement. It was manifest that the police could not have spoken the truth at this trial, and yet the Commissioner would not have an inquiry until this threat of action. As soon as a threat of civil proceedings was made by the defendant's solicitor, the Commissioner at once proceeded to make the investigation that he had previously refused, admitted that the police had acted unjustifiably, apologised, and paid compensation. The disturbing fact about it is that the threat was necessary before that was done. The accumulation of these cases absolutely shatters every pretence of police impartiality.
My hon. Friend has told the House about the brutal way in which the police have been using their batons in London. Coming from Scotland, I must say that nothing has surprised me more than the readiness of the police to use their

truncheons. To me, it is amazing. A London crowd is not a bad crowd. I claim to know something about crowds in different parts of the world. I have been a student of crowd psychology and have read books on the subject. A crowd in Glasgow is made of sterner stuff, and a crowd in America is even worse. A crowd in London is good-natured. As a Scotsman, I must say of the Londoner and of the Englishman in general that he is a very good-natured gentleman indeed, as shown by the fact that there are so many Scotsmen here. No one would say that a London crowd is difficult. It is timid and tolerant, perhaps too timid and too tolerant. My hon. Friend has also told the House the regulations about the use of batons. It is laid down in the police code that batons are to be used only in an emergency, when the police are being overpowered and a prisoner is violent.
A point which I did not notice in my hon. Friend's reference was that when the truncheon is used it should not be against the head of the victim. The arms and legs are to be struck, but not the head. In the Fascist march, on Sunday, 3rd October, 1937, a girl, Miss Moira Lynd, was struck on the head by a policeman—a severe blow. A bad wound was inflicted, which bled profusely. She was the daughter of Mr. Robert Lynd. A little later than this time last year, hon. Members who go to the cinema will have seen the Movietone News review of the year, in which was a picture of a Fascist march and something of the riot. When I saw that film, and saw the police striking down spectators promiscuously and indiscriminately, I was ashamed. I realised that that film would be shown all over the world and that this brutality would be broadcast all over the world. I felt ashamed because the good name of our country would be lowered by such action of the police.
I can speak with intimate and personal knowledge of the police. Some years ago, during the hunger march, I stood at Marble Arch and saw the police clear the crowd from inside the railings. They had pretty well got the crowd cleared away, but one man was running across when he was spied by a policeman on horseback. The policeman gave a shout and was off after him. A crowd of young


policemen were there—I was told afterwards that they were special constables—on horseback. The policeman on the horse saw the old man running away as hard as he could. The man looked back and saw the policeman gaining on him, and he gave a cry like a trapped rat. He grabbed his hat off his head to make himself go faster. The horse came up behind him, and the policeman rose in his stirrups and struck that man down. The man sank forward and collapsed. I saw that done, and hundreds more also saw it. That policeman was in no danger, and what he did was a case of pure brutality. I want hon. Members who doubt any of the statements that have been made to think of that; I have referred to something which I saw myself.
Let me give one other instance. Later on that same day, I was standing on the pavement watching the contingent of hunger marchers arrive from Scotland. There was a crowd in front of me, and along the crowd was a row of special constables. The hunger marchers were being shepherded by regular London police. I have already said how good-natured the crowds are here. What was happening at that time was that the crowd beside me were chaffing the "specials" and the police. The regulars—as I have found out since they were—were walking along, and smiling cheerily and good-naturedly to the crowd. Suddenly a strange thing happened. The "specials" turned round as one man and attacked the crowd, and the first man to be struck down was a member of the C.I.D. in plain clothes. The Under-Secretary smiles; he can verify that for himself. These policemen were attacking, as they thought, a Communist crowd, but among the Communists was this C.I.D. man, who was the first to be struck.
May I give the House one other experience of my own? It has never been told in public before. I happened to be watching a meeting in Hyde Park—by no means a disorderly meeting. A Fascist was speaking. A little man came along and stood in front of me, and there were two policemen on my right. The meeting broke up, and several people in front began to sing "The Red Flag." I do not know, Mr. Deputy-Speaker, what you think of "The Red Flag"—

Mr. Fleming: A very dismal tune.

Mr. Weir: The hon. and learned Gentleman does not know that "The Red Flag" is one of the finest tunes in the language—

Mr. Fleming: Not in my opinion.

Mr. Weir: —and the words are a very good poem indeed. I know that Mr. Bernard Shaw has referred to the tune as "The Funeral March of a Fried Eel." Some people in the crowd began to sing "The Red Flag," and this little man in front of me—he was a young man—began to sing too. Immediately the two policemen pounced upon him, and, twisting his arms round till he yelled with pain, hustled him out of the crowd. As the man had done nothing beyond singing "The Funeral March of a Fried Eel," which is not a criminal offence, I followed to see what was going to happen. I went to the police station in the Park, and I asked the officer in charge what this young man was charged with. He gave me an evasive reply. I persisted. We had some cross-talk for a bit, and then a policeman came round the end of the counter and said to me. "I think you had better stay in here too." I may add at that time I was Parliamentary Private Secretary to the Prime Minister, so I was allowed to go, but I was very anxious to know what happened to the young man, and I went to the court the next morning.
The court was crowded, and this young fellow was in the dock. The two policemen were there, and gave evidence. They told a very lurid story of how this young man had been rioting and fighting, and how he had attacked them; and I should add that they were both present to hear one another's evidence, which was rather strange in a court of that kind. The one, of course, corroborated the other. The magistrate asked the young man whether he had any witnesses, and the young man said "No." I then rose at the back of the court and asked permission to speak. I was asked to come forward, and went into the witness-box, and, after taking the oath, the magistrate asked me my name. I told him, and he said, "What are you?" I said, "I am a Member of Parliament." There was what is called "sensation in court." The magistrate asked me, "What did you see?" and I told him the facts which I had seen. Not only did he discharge the man, but he expressed his thanks to me


for coming there, saying that my appearing at that time showed a due sense of public duty. What would have happened to that young man had not I, who was not a person of very great importance, arrived at the court and given my testimony? It is because the liberty of the subject has been, as I believe, encroached upon so much in recent years, and because such encroachment threatens the maintenance and impedes the development of a healthy democracy, that I second the Motion which has been moved by my hon. Friend.

8.42 p.m.

Captain Cazalet: I beg to move, in line 1, to leave out from "House" to the end of the Question, and to add instead thereof:
remains fully conscious of the paramount importance of the liberty of the subject, recognises that restrictions on civil and political liberty can be imposed only by the authority of Parliament, and affirms that such restrictions should be confined to the minimum essential for the maintenance of law and order, the promotion of the public weal, and the safeguarding of our free institutions.
I have listened with great interest to the speeches of the Mover and Seconder of the Motion, the latter being the first man from North of the Tweed who seemed to show a positive embarrassment at the reception which he gets in this country. I listened with great interest to his personal experiences, but he will not expect me either to follow him or to be able to answer some of the points which he has put. Perhaps the House will allow me to deal with this question on rather more general lines, leaving the legal aspect to my hon. Friend who is to second the Amendment. I think it is quite true that all executives are inclined after a time to usurp to themselves certain powers which occasionally conflict with the freedom and liberty of individuals, and it is only right and wise that every now and then we should examine this question. I do not think the present Government have any reason to be ashamed of an examination into this particular accusation. As the Amendment says, we are singularly free in this country from the arbitrary restrictions on civil and political liberty which we see in so many countries of the world to-day.
I should like to examine for a moment as to how this freedom has been achieved. I think hon. Members will agree that it

is largely due to the fact that for generations, even centuries, the State in this country has been conceived of as a collection of individuals. Not only have they equality before the law, but the individual in this country possesses a status, almost a sanctity, which has to be protected from attacks either by other individuals, by corporations, or, indeed, by the State. There has never been in this country an overwhelming State machine, no droit administratif. After all, the individual has always had the opportunity of recourse to the courts for the defence of his liberty, and before them he can state his case. In this country arbitrary power has always been considered an evil, whether exercised by a king, nobles, landlords, or the mob, or even by a majority in this House. Lord Coke said to James I:
The King is under God and the law"—
and I understand that by "the law," he meant the common law arrived at as the result of years of judicial decisions. It is quite, true that the passage from barbarism to civilisation has been a long, halting, and uncertain process, but in this country it has resulted in the fact that individuals are considered not as things but as persons, and wherever in the world you have departed from that principle you have, in my opinion, taken a step back towards barbarism.
In this country, Parliament has always constituted itself as a kind of judge between individuals, and I think it is essential that Parliament should continue this function. If hon. Members wish to see this argument developed in greater detail, they will see it put forword in a book called "The Good Society," by Walter Lippmann. It is the duty of Parliament in this country to protect citizens from arbitrary actions, far more than it is our business to pass arbitrary Acts directing what their activities shall be. It is clear that there have to be limits, however, to individual freedom. In the interests of individuals, we have to accept certain restrictions and regulations. We say that religion is free. So it is; people are allowed to worship in any way they wish, but we do not allow them, for instance, to have blood sacrifices. A man is allowed to sell his labour wherever he finds the opportunity, but there are restrictions in regard to times and conditions of work. These conditions


have been fixed, as a result of long experience, by common sense, by compromise, and by the decisions of Parliament itself.
It may be asked, after listening to the speeches of the Mover and Seconder of the Motion, in what particular line of activity do they really fear that individual liberty is in danger to-day. Is there any unjust restriction on Members of this House? Would anyone suggest that the Press is not sufficiently free, and that there should not be certain libel laws? The gravamen of the hon. Member's charge is that on the platform he is not as free as he would like. I wonder what it is that he is so anxious to put before the public that he cannot say on a public platform. I think many of us in this House, certainly all on these benches, have attended meetings in the hope of being able to address them, and have been unable to speak a word. Just because you do not like what somebody else has said, or think he is going to say, it is not very good evidence of your passion for liberty to prevent his speaking at all. When your political opponents irritate you, as they sometimes do, beyond a certain pitch, instead of trying to prevent them expressing their views, it is just as well to remain silent for a moment and think how fortunate you are to be in a country where you can have political opponents.
Where do we find the political restrictions about which we have heard? We find them in dictatorship countries, whether of the Right or the Left; both Fascism and Bolshevism are not only anathema here, but are extraneous to the character of our people. When these foreign plants are imported here certain unusual, and I hope temporary, restrictions may be necessary. For instance, the hon. Member who moved the Motion made an attack on the police, particularly the police of London. I believe that to be wholly unwarranted. I believe that, in extraordinarily difficult circumstances, this great body of men have rightly earned the regard, sympathy, and support of the great bulk of the people of this country. Personally, I have not much use for these constant marches which take place on Sundays. It seems to me that these marches with banners are alien to our character and most discomforting to our quiet and peace on the Sabbath day, especially when we remember that some

of these marches have occasioned thousands of police losing their day of rest.
It does not matter whether you begin with the totalitarian or collective State from the Right or the Left, once you start with either political or economic restrictions, you soon end up in the same way. My suggestion is that in Socialism itself lie the very seeds of these restrictions of which hon. Members are accusing the Government to-day. No doubt, there are many interpretations of Socialism. It is sometimes very different in practice from what it is in theory. If we study the most recent works on the subject of what the next Labour Government will do, one thing, at any rate, we understand, and that is that the Socialist party have a very different conception of Parliament from what we have to-day. We hear of enabling Acts which would give the Executive powers which would have shocked the early Stuarts. [Interruption.] That is exactly why I pointed to the powers of which the next Socialist Government would hope to avail themselves. I believe that no one will be more surprised at the length to which Socialist policy will carry them than many of the Socialists themselves. I am not suggesting that there is not a wide field for social reforms in our existing economic state.

Mr. Quibell: The hon. and gallant Member wants to save us from ourselves.

Captain Cazalet: Yes. I hope to be allowed to develop my arguments in my own way, and this I intend to do. You cannot start regulating and controlling the economic life of this country without very soon endangering both political and civil liberties. We have heard many times as to what is to be the financial position when the Socialist Government come into office, and I want to emphasise that the connection between economic restrictions and political restrictions is very close. We know that if there is no panic at any rate credit would be seriously upset. There might easily be a flight of capital abroad. If individuals, by some enabling Act, are forbidden to do what they wish with their own, what happens. You have currency control and financial restrictions, and it is a very short way after that to control of imports and exports.

Mr. E. J. Williams: May I ask you, Mr. Deputy-Speaker, whether we shall be able to discuss the record of the Government and the Acts which they have passed which encroach upon the power of the Executive?

Mr. Deputy-Speaker: That would not appear to be outside the scope of this Motion.

Mr. Williams: Surely, that is what the hon. and gallant Member is now discussing. He is arguing that it is possible for the Government to do certain things that may prejudice civil liberties and all the rest of it, and surely, in doing that, he is so broadening the Debate as to make it possible for us to discuss the record of the Government.

Mr. Deputy-Speaker: The House is able to discuss only what appears in the Motion which appears to me to be very wide.

Captain Cazalet: The Government have been attacked for pursuing a policy which has brought the restriction of civil rights, and I am answering this by saying that the Socialist party—and this Motion has been brought forward by the Socialists—will, I believe, entail these very restrictions of which they are accusing the Government to-day. I do not believe that you can have State planning by degrees. Once you start to interfere with one section of the community in economic matters, you have to interfere with every other as well. We have seen these plans put into practice in various countries, and these results have always followed. Either the plan breaks down altogether, or they plan entirely wrong, and you find an immense shortage of the commodities which the people most desire. If you stop the exchange of goods, you will very soon stop the exchange of ideas. [Interruption.] I am fully aware of the arguments hon. Members would raise. They are not analogous, but I have no time to develop that point now.
It will be seen that, in the countries where these economic restrictions have been put into operation, it is a very short path from economic to civil restrictions. We see in Germany and Russia to-day labour restrictions confining every man to continue to work in the particular industry and in the particular place where he finds himself at any given moment.
I believe that civil restrictions must necessarily follow these economic restrictions. It may be possible to carry on for some time, as these countries have carried on, by intensive propaganda and by a tightening of belts. The world cannot live in watertight compartments without explosions. The collectivist State, wherever it has the power, means not only death to economic prosperity, but the end of political liberty as well. It has been proved in every instance where we have an example.
I am not suggesting that any hon. Members or any political party in this country would go to the length that we have seen abroad. There always will be in this country a sufficient number of courageous spirits who will fight for the maintenance of their liberties, and they will not be confined in one party. In England we have faced a series of crises in the last few years with the very minimum of interference in our general economy and the maximum degree of liberty to the individual concerned. It is not by chance that in this country, where there has always been the freest economic liberty, there has been the greatest degree of political freedom as well. I do not think that we can afford to ignore these lessons from history. It is true that in our own country we have dealt with each crisis as it has arisen in our own particular way. It does not seem to me at this moment, as we look around and see what has happened elsewhere, to be a nice thing to try to persuade people in this country or anywhere else that our civil and political liberties are in danger. For generations, even for centuries, this country and the name of this country have been synonymous with toleration, liberty, and individual rights, and at no time in the past have we deserved this reputation more than at the present moment.

9.4 p.m.

Mr. H. Strauss: I beg to second the Amendment.
I certainly shall not seek to minimise the differences which separate those who support our Amendment from those who support the Motion which was moved by the hon. Member for North Lambeth (Mr. G. Strauss). At the same time, I think that perhaps the House can derive some satisfaction from the fact that there is no Member in the House who does


not think that the question of civil and political liberties is important. I shall, in the course of my speech, endeavour to reply to some of the specific points which the hon. Member for North Lambeth put forward. Before I do so, I should like to say that we on this side of the House are a little astonished that this anxiety for civil and political liberties comes from him at this moment. The hon. Member at the beginning of the present year associated himself with the Unity Campaign manifesto, a paragraph of which, dealing with foreign affairs, said:
The working class must mobilise for the maintenance of peace, and for the defence of the Soviet Union.
The Soviet Union was the only country mentioned which we ought to defend. The Soviet Union no doubt exhibits those ideals of civil and political liberty and those ideals of democracy which inspired the hon. Member when he set down this Motion, and he must have felt the utmost gratification when he saw in the newspapers an account of the elections in Russia last Sunday; the magnificent way in which the rights of free speech, the right of assembly, the right to criticise and oppose were so splendidly guaranteed to the opponents of Stalin. It must have been a shock to him when he saw in Monday's "Daily Herald" the terrible attack upon the whole system. Not only did it contain the accusation that the Soviet Union was not democratic, but the "Daily Herald" was so wrong-headed as to point out that the opponents of the régime were punished by death. Death is a word never used by the genteel and mealy-mouthed Left. The "Daily Herald" ought to have known that "liquidation" is the proper expression.
The hon. Member mentioned as an indictment against the police and the Home Office the affair of Thurloe Square, which has already been debated in this House. He called attention to the purported inquiry into the circumstances which had been held by a strange body, whose report filled everyone with legal experience with hilarity. I would remind the House of one fact, and I believe hon. Members will agree with me in my estimate of that report. The House may remember that when the matter was debated the hon. and gallant Member for the Aston division of Birmingham (Captain Hope) gave his evidence as an eye-

witness of what had occurred. The report to which the hon. Member for North Lambeth referred was such that the only way in which they could explain the evidence given in this House by the hon. and gallant Member for Aston was to declare that he must have been mistaken and the victim of an illusion. If there is any hon. Member in this House who attaches the slightest importance to that report, except the Mover of the Motion, I have yet to meet him.
The hon. Member made one remark about the police and the Home Office which is quite true, but there is an explanation. He said that at an earlier meeting of the Fascists at Olympia the Home Office took the view that the police were not entitled to enter the meeting uninvited until some disturbance had taken place. The hon. Member pointed out that a little later, in the Glamorgan case, known to lawyers as the case of Thomas versus Sawkins, the Court of King's Bench held that such a right in the police did exist. That is the explanation of the change. That decision was as much a surprise to the Home Office as it was to a great many practising lawyers. Every practising lawyer knows that that decision is causing a great deal of discussion at this moment, and I hope very much that the time will come when, in a slightly different form of proceedings, the higher courts will be able to say precisely what is the proper extent of the doctrine laid down by that case.
The hon. Member complains that freedom is suffering encroachment and that the maintenance and development of our democracy are threatened. I wonder how many intelligent foreigners coming to this country at the present time would be struck by the fact that democracy was threatened or that we were less keen about political and social freedom and were likely to let our heritage of those great assets disappear. I should have thought that the intelligent stranger visiting this country was more likely to be astonished that this was one of the few places in the world where democracy showed every sign of continuing vigour, and where it was obvious that we were determined to preserve our political freedom. I should have thought that, beyond and above the hard-fought controversies that separate the two sides in this


House, there was this in common, that we could unite at least in our belief in our free institutions and in the necessity for their preservation intact.
I may say for those who support the Amendment that our most fundamental belief in politics is in the dignity, the importance, and the status of the individual citizen. We believe that he was not meant to be a sort of robot or an unit in a human ant heap, but a free citizen of the State, that the duty of the State was to give him scope to develop his capacity, that the State existed for him, and that he did not exist for the State. If this is our attitude on these questions, what is our view on restrictions? There is no one in any quarter of the House who says that no restrictions are necessary. We are all agreed that restrictions are necessary. In this country, at any rate, we have no theoretical anarchists. If everybody was free to do as he liked, nobody would like the only things which he would be able to do. The proper object of restriction is so to organise your society that the restriction gives more freedom than it takes away. Can we go further in general propositions about restriction? I think we can. I think we can agree that restriction should be imposed only by law and not by the arbitrary exercise of power. The rule of law should prevail, and in the making and amendment of that law the individual should have some part. If I mention a third qualification, it is that majorities should have some respect for the rights of minorities.
I have mentioned some of the foundations of our liberties. The rule of law is the most fundamental principle of our Constitution. Our freedom is not based, as some countries have vainly tried to base their freedom, on great, formal declarations of general principles. It is based on the universality of the rule of law and the freedom of every citizen to do those things which infringe no legal right and do not offend against any legal prohibition. Our courts are not subject to the Executive. The servants of the Crown are not immune from the ordinary law, which is a great distinction from the practice of many countries which recognise what is known as the droit administratif. The law is subject to the approval of Parliament and it is in the King in Parliament that sovereignty re-

sides. It is a Parliament in which publicity and the force of public opinion can be brought to bear on any subject whatsoever, and no remedy is excluded.
Those are the general principles and the general basis of our liberties. By what threats are those liberties threatened? They are certainly not threatened by any desire of the British people themselves. The British people show no desire whatever to throw away these traditional liberties or to welcome any tyranny in their place. Is this liberty threatened by the executive or by the bureaucracy? I do not seek to minimise a matter on which I know the hon. Member on the Liberal benches feels so strongly and upon which he has so often expressed himself, and the point of view expressed by the Lord Chief Justice in his "New Despotism." I think the hon. Member of the Liberal party will agree with me that whatever the extent of the evil which was brought to light in that book, and in the various speeches which have been made in this House, including speeches by the hon. Member himself, in recent years that evil has diminished; that is to say, the particular Clauses against which that book was written and against which other lawyers have spoken are finding their way less and less into modern Statutes, for which I think great credit is due to this House itself.
I think that as a result of the complaints made from every quarter of the House the Parliamentary draftsmen and the Executive would now not be willing to risk introducing in a Bill, even on Second Reading, the sort of Clauses which they hoped to get away with only a few years ago. I think I can even persuade the hon. Member on the Liberal benches that in the last year or two at any rate that evil has not increased. I do not think it would be fair to any quarter of the House to suggest that tyranny on the part of the Executive is likely to escape attention, or that if detected it will not be effectively dealt with in this House. But whoever is entitled to make any complaint of such encroachment, the last person entitled to make any complaint is the hon. Member for North Lambeth, who has so frequently expressed his sympathy with the ideas put forward by the hon. and learned Member for East Bristol (Sir S. Cripps), whose idea of the functions of this House is to get Parliament to pass


an Enabling Act, and then allow the Executive to proceed by Orders in Council. From whatever quarter that complaint may come, it comes with ill grace from the hon. Member for North Lambeth.
I do not believe there is any very dangerous threat to our civil and political liberties from any quarter, but I will tell the House quite frankly where I believe that such a threat exists, if it exists anywhere. The threat comes from extreme factions, insignificant in themselves but with a power to create disturbances and threaten law and order. If ever the State should become too impotent to keep order, then the people may tolerate anybody who is prepared to restore order. The one risk to our liberties is the growth of such disorder that the people will say, "Anything for order," and will not examine too closely the policy of the extreme parties who promise to restore order. The breakdown of law and order is the one certain way to produce revolution in any country, and in this country it is the one and only way in which our people could ever be brought to accept a tyranny. That is the reason why the Fascists and Communists are potentially dangerous. Intellectually and numerically they are negligible, but they advertise each other, and they thrive on disorder.
That brings me to a matter mentioned by the hon. Member for North Lambeth, namely, public processions. The matter can now be dealt with, as we know, under Section 3 of the Public Order Act, 1936, but it should be made quite clear to the House—I think it has been made clear by no less an authority than the hon. and learned Member for North Hammersmith (Mr. Pritt)—that even without the Public Order Act of 1936 there is no absolute right at common law to hold a procession. It is subject to the public right of user of the street. The question, even without the Public Order Act, would be: Is the proposed user of the street by the procession a reasonable one? It is quite possible even under common law that a school crocodile would be perfectly legal, though the parade of 1,000 men would not. The matter has been taken further by Section 3 of the Public Order Act, and the Home Secretary on 21st June of the present year made an Order under that Section prohibiting the passing of political processions, irrespective of party, through the

Jewish quarter of London. That was coupled with a warning to organisers of any counter-demonstrations against a lawful demonstration outside the prohibited area. The ban made under that Order was a ban on all political processions irrespective of party, and the hon. Member complained about that. He thought that the Fascists should have been singled out. The Act says:
Prohibit any class of public procession.
It would be grossly improper, indeed it would be of doubtful legality, for the Home Secretary to ban a political procession of one particular party. Really it is rather effrontery on the part of the hon. Member to try to convince this House of something of which he cannot convince the Labour party in London. The London Labour party met on 27th November of this year, and the hon. Member seconded a resolution advocating the thing which he is advocating in the House to-day. I should like to read a few sensible remarks which were made by the hon. Member for West Islington (Mr. Montague). There was a somewhat lively exchange during the hon. Member's speech, and the hon. Member for West Islington said that the resolution which the hon. Member for North Lambeth was seconding
was not based on the principle of democracy but on principles which could hardly be distinguished from those of Fascism.
At this point there were shouts of "Sit down" addressed to the hon. Member for West Islington, who retorted:
I shall not sit down. That is just what I am speaking against. I protest most emphatically against the adoption of the idea of this kind of Communist-Fascist philosophy.
I do not always agree with the hon. Member for West Islington, but I think he put the point very fairly. It is curious that the hon. Member for North Lambeth should expect to get away, in this House, with something of which he could not convince even a section of his own party in London. But he has been more successful with his friends of the "Unity" manifesto, because, of course, those with whom he was then associated and from whom he is not perhaps to-day very far distant—the Independent Labour party and the Communists—take a different view from the Labour party on this matter, as we know from what occurred on the last occasion on which we had serious disturbances in London.
Let me deal with what occurred on 3rd October this year. On that Sunday the Fascists were going to have a permitted procession—not a prohibited procession—in South London in an area which was not predominantly Jewish. The Labour party, very properly, recommended their adherents to boycott that procession—if I may say so, very sensible and good advice—but the other two parties with which the hon. Member for North Lambeth was at that time associated did not take that view. By their publications and otherwise they advised their supporters to congregate at two meeting places and to prevent the passage of the procession. It was precisely at those two places that the chief scenes of disorder occurred. I have here the statistics of those arrested on that occasion. There were 114 arrests, all of anti-Fascists—for insulting or threatening words or behaviour, 60; throwing missiles, 23; obstructing the police, 24; possessing an offensive weapon, 16; assaulting the police, 28; wilful damage, 3; setting fire to fireworks (which were thrown under the horses), 3. In only two cases was there a successful appeal. I do not believe any quarter of this House would tolerate for one moment, with that record of events, that any action should be taken against the Fascists and not against the Communists.
We heard from the answer given by the Home Secretary to the hon. and gallant Member for Midlothian (Captain Ramsay) on 11th November that in the Metropolitan Police district between 1st January, 1936, and 31st October, 1937, there were the following cases of assault on, or violent resistance to, the police: by Communists and their sympathisers, 104; by Fascists and their sympathisers, 2. It is quite unjust to say that if there is to be discrimination in this matter—which God forbid!—there is a special case against the Fascists which does not exist against anybody else. I will say this too about these people who created disorder on that occasion, that many of them were imported from a great distance. Do not let the House believe that these were innocent citizens stirred beyond endurance by seeing some men marching in a procession.
What about the right of assembly with which the hon. Member also dealt? A

great deal of nonsense is talked even about the right of assembly. As regards assembly on the highway, there never has been any right of assembly. It is always a trespass against those in whom property in the highway is vested, and it is very often a nuisance to the general public. The only right on the highway is to pass and re-pass for the purpose of legitimate travel. So much for what the law always has been on this subject. Nor, as has been held by judicial decision, is there a common law right to hold public meetings in Hyde Park or Trafalgar Square. Of course it does not in the least follow from the fact that there is no such absolute right of public meeting that we do not want people to be able to meet publicly, as far as is reasonably possible. But the idea that the police are bound to allow political meetings on the highway which may seriously interfere with the traffic is, to my mind, quite preposterous. Nor is there the slightest reason to think that there is any impropriety whatever in the police discouraging such meetings in the neighbourhood of a labour exchange. Anything more likely to cause a nuisance cannot easily be imagined.
The hon. Member dealt not only with the police, but also with various Statutes, but he never said what his complaint against those Statutes was. If he attacks the Trade Disputes and Trade Union Act, 1927, perhaps he will tell us what he thinks is wrong with it, and not simply say, "I do not like the Statute." It is perfectly true that the Statute endeavours to legislate against a general strike. It may be that he wants bigger and better general strikes, but the people of this country do not, and least of all do trade union leaders want them. And I wonder how many trade unionists or trade union leaders who sit among hon. Gentlemen opposite have ever felt themselves obstructed in any degree whatever by the existence of the Act of 1927.

Mr. E. J. Williams: As one miners' leader, may I say that that Act has affected me many times in legitimate picketing?

Mr. H. Strauss: I think the case for the prevention of intimidation was very strong, and I shall be very much interested to hear how hon. Gentlemen opposite propose to deal with the Act. If they propose simple repeal, they will find such


repeal extremely unpopular. The hon. Gentleman dealt with the Incitement to Disaffection Act, 1934. Again he did not tell us what his objection was, except that one person had been prosecuted thereunder and had received what he considered an excessive sentence. That seems to me an insufficient ground for saying that that Act is oppressive. Let me remind the House what that Act does. It: makes it an offence to endeavour to seduce any member of His Majesty's Forces from his duty or allegiance. Is there an hon. Member in any quarter of the House who does not think that that ought to be an offence? It was an offence before the Act, but before the Act it could not be dealt with summarily; now it can. And if hon. Members say they would like to repeal that Act, it would follow that a man could only be dealt with on indictment.

Mr. G. Strauss: The hon. Gentleman has accused me several times of not elaborating my reasons against the Act. I do not want to repeat all the arguments made when that Act was before the House and was strenuously opposed by the party on these benches. Limitation of time prevented me from dealing with them, though I should be very happy to do so.

Mr. H. Strauss: I willingly gave the hon. Member the opportunity to make that explanation, but let me remind him that a great deal of the Debate in this House on that Bill was against the Bill as it was introduced. It was not against the Act as it is now on the Statute Book; and if hon. Members opposite say that there is a considerable difference between the two, that may or may not be a good point against the draftsmanship of the Bill as it was introduced, but it is also a tribute to this House and to what it can do to make a Bill good and innocuous.
The conclusion of our Amendment refers to
the promotion of the public weal, and the safeguarding of our free institutions.
Those two matters are very closely connected. We shall not safeguard our institutions unless we can promote the public weal; and we shall promote the public weal better if we safeguard our free institutions. The hon. Member for North Lambeth, when he stopped at the words "preservation of law and order," said

that we could logically defend anything under those words, even the abandonment of our free institutions. If he had gone on and read to the end of the Amendment, he would have seen how utterly untenable that proposition was.
Let me put this to hon. Members in every quarter of the House. Democracy is not very safe anywhere in the world. It is a difficult form of government, but it is extraordinarily worth while. If hon. Members will analyse what it is that has brought democracy down in those countries where it has been brought down, I believe they will come to the conclusion that it has far more often failed because of the folly of its friends than because of the efficiency of its enemies. Those are not the best friends of democracy who talk most about it, but those who take the most efficient steps to make it work effectively and to avoid what have been its characteristic weaknesses. Those characteristic weaknesses have been that democracy has often failed to produce strong governments and has often been unable to produce continuity of policy. By a characteristic exercise of British political genius, we have in these years or crisis avoided those two evils. I believe that we can continue to do so, and that by that method we may save democracy here and in the world. I commend the Amendment to the House.

9.37 p.m.

Mr. McGovern: I wish for a few minutes to deal with this subject from a different angle. I agree that restrictions on civil and political liberty have taken place in this country, and indeed in almost every other country. I believe that both the civil and political liberty of the subject are determined largely by the rise and fall of economic conditions. In this country we have a greater measure of liberty than exists in most of the older capitalist countries. That is not due to the desire of our rulers to give us that liberty, for they have resisted every inch of the way in the upward struggle for human liberty, but to the fact that in an expanding economic system of capitalism, the reins are loosely held. Political liberties are conceded during the period of struggle, not because our rulers desire to increase liberty, but in order to safeguard the economic system which they run. When crises occur, when the old institutions are unable to function or the rights of private property and exploitation


to operate, the reins are tightened by means of economies and means tests, and there are parallel restrictions on civil and political liberty as a result of those developments.
In countries such as Germany and Italy, there has been a complete ending of all civil and political liberty because the system of private property and private exploitation went down into complete crisis and the institutions were unable to function. In this country we have retained a large amount of liberty because of the greater powers of expansion in the British Empire. We have a large amount of territory and a large amount of yellow, brown, black and white unpaid labour which give the rulers of this country a greater pull in keeping the people in temporary subjection and in agreement with the existing order. Nevertheless, encroachments on civil and political liberty are gradually being made by an astute ruling class which sees the danger that three will be in the next period of slump, when they may require extra constitutional powers in order to guarantee the continuation of the present system with the minimum amount of liberty necessary for the protection of the rights of private property and private exploitation.
Liberty has been taken from the citizens of this country, under the guise of the defence of democracy, in a very cunning and astute manner. For example, I am convinced that the National Government allowed Mosley to develop in the East End of London to the extent that he could be regarded as a menace, not because the Government wanted to suppress Mosley, for he is nearer to their point of view than is any section of the working class, but in order that they might have an excuse for the suppression of all advanced thought and activity in the East End. Under the guise of the menace of Fascism, the Government brought in a Bill which gives them the power to prevent all Left opinion from organising itself in the East End of London. That always has been, and always will be, the method of the ruling class in preventing advanced thought and activity by the people of this country.
Stupid things are done in different parts of the country by rather stupid police inspectors and police superintendents. I

do not say that the Home Office are responsible for all the stupid activities of stupid chiefs of police. I have found out that police chiefs in many areas are, like many other individuals, actuated by likes and dislikes, and that in some cases they are actuated by a sense of fairness towards those whom they believe to be trying to express in a legitimate manner their antagonism to any encroachment either on their liberty or their economic power.
I will give the House two examples. In a hunger march in which I took part, I met in Luton a police inspector who did not attempt to place a single extra policeman on duty when we marched into the town. He said to us: "I want to see that your people have the proper constitutional method of approach in this area; I do not want to have you hampered in the expression of your legitimate aspirations." He cancelled a public meeting that was to have taken place at the town hall in order to be able to house the hunger-marchers there. He invited us to meet him. As that town had been selected as one in which there would be a day's rest, he telephoned all the picture houses, with the result that every man taking part in the hunger-march was able to see a free show that evening. He marched in mufti to one of the picture houses at the head of the men, and marched back to the town hall with them afterwards. He had a cup of tea with the leaders of the march, and on the following morning, to the consternation, and, I believe, the dislike of certain of the Communist leaders, the men responded by cheering the chief constable to the echo when they left. He had given us decent treatment which we were bound to appreciate; I state that now, as I stated it publicly in the town.
Then we were in Birmingham, and there we met with exactly the opposite treatment. We met with a militarised type of police officer who refused to allow collections, and who was ready to draw the baton on any excuse. He afterwards mustered his men in the local schoolroom where our men were housed and paraded them unnecessarily and in a very provocative manner. At two o'clock in the morning we demanded that the police should leave the building, and in an upper room where the police chiefs themselves had congregated, we found empty whisky bottles and beer bottles


which they had left behind them. It was only tact and understanding, decency and good leadership that prevented a riot in that town, and there was always that danger from the moment we came in until the moment we left. On such occasions the tact and judgment of a policeman or police inspector is of great consequence.
Then take the case of the chief of police in the Glasgow area. He came to Glasgow just after there had been riots in that city. The riots had been caused by mounted police going into the centre of a demonstration two or three seconds after they had requested the meeting to disperse, and before there was any opportunity of consultation with those responsible for the demonstration. They had not waited a moment but had ridden through the crowd and batoned the people. Afterwards they charged a number of us with all kinds of actions, such as breaking windows, stealing, and so forth. The present chief constable who arrived just after that period, had a conversation with me in which he said: "During my period of office I am prepared to give the right of legitimate and constitutional expression of views against poverty, against the means test, against economies and on any political question. As long as there is no attempt to use rough stuff in this city, I will give you every liberty and if you tell me in advance what your plans are, I will make arrangements to see that you have that liberty." That is what might be termed intelligent action by a police officer, and that kind of action earns the respect of all men who are guided by principle and decency, because they feel that they are being treated as human beings, and not as outcasts.
To take a further case I want to tell the House what happened to one of our own people in connection with the sale of the "New Leader." It sells about 30,000 copies a week, all by the personal efforts of individuals as it is debarred from the ordinary newsagents. They will not sell a penny paper and we have to depend on the efforts of our own members selling the paper in public places. One man was selling these papers at Hyde Park. A policeman ordered him away and when he went 30 or 40 yards away, followed him, hounded him, dogged him and told him that under the by-laws he was not allowed to sell papers

there. The individual in question asked under what by-law he was prevented from selling the papers. The policeman seized him by the neck and said "Come to the police station and I will show you the by-law." That is the kind of stupid treatment to which people are sometimes subjected. The man was brought before the court and charged with causing an obstruction. Because he took the oath in a particular way he was told that he was the type of individual who could not conform to the ordinary law and was a very disagreeable fellow. He was fined, I think, rather for being a disagreeable fellow than for breaking any by-law.
These acts of tyranny by policemen and police officers are largely influenced by the amount of vigilance and control exercised by the Home Office and the authorities. If the authorities show that they are prepared to back up policemen in illegal acts, we know what is likely to happen. I know there is always the defence that the man on the job must be supported. The officials say "We must not break down discipline; we must defend these people, because if we do not back them up there will be a feeling that we are not giving them a square deal." But we know that the authorities themselves sometimes have no great faith in the police. It has come out in the Press and in this House that they have been prepared to select lady police-officers to spy on male policemen. They are prepared to use even criminals who have served periods of imprisonment, as spies on certain officers. I have known cases showing that while there is a general defence of the police, the authorities themselves, when it suits their book, are prepared to spy upon officers and Criminal Investigation Department men throughout the country. There is no general confidence.
Therefore I say, as I said at the beginning, that the civil and political liberty which exists is largely due to the necessities of the ruling class and of the system. For my own part, I desire to see democracy and civil and political liberty preserved and expanded in every way. I see great dangers throughout the world. I want no dictatorship either of the Right or of the Left, because dictatorship, even of the proletariat, tends to become a dictatorship of a few bureaucrats and thugs who are prepared to exercise their power against the great mass of the people


when it is not convenient to allow freedom of political thought. I have seen the result of that, and I am bound to say that I do not rule it out as a possibility in this country, if it should be found essential to the preservation of the rights of private property and private exploitation. I have seen it within the last two or three weeks in Spain. I have seen a police force there, organised by an outside force, with abductions and torture and murder taking place under the guise of protecting the interests of the people in that country. I do not want that in any shape or form, and I agree with one thing that was said by the hon. Member who spoke last, that sometimes the excesses of one section produce the excesses of another.
I also admitted while I have been associated politically with action against Fascism and against Mosley, I think the creation of Mosley's influence has been largely due to the advertising of demonstrations in various areas of the country. If we had treated him as being of no political significance, if we had treated him with contempt and laughter, he would not have grown as he has grown. But when people are brought into the streets by the thousand, and defences are erected of old carts and old bedsteads and the like, then the mass of decent-minded people say to themselves "These Communists are out again trying to interfere with the liberty of the subject, and we have all suffered from the attempts of the Communists to interfere with the liberty of the subject." While I think the Mover of the Motion has served a useful purpose by raising this matter on the Floor of the House of Commons and drawing attention to the encroachments on the liberty of the subject which are taking place under a decadent capitalist system, I see them as part of a process of development. When capitalism is rising and developing the rein is kept loose, but when capitalism is going down into difficulty and distress, then the rein is tightened. My advice to the organised working-class is that as a reply to that tightening of the rein and as a counter action to it, they should develop a strong, virile, militant working-class movement, which will be vigilant to preserve the liberty of the people and defend themselves, politically, economically and religiously against all the foes of freedom in this country.

9.55 p.m.

Brigadier-General Sir Henry Croft: I should like to congratulate the hon. Member for Shettleston (Mr. McGovern), who has made a speech which, although I do not agree with everything he said, was in large part a tremendous tribute to the ideals of British democracy, the spirit of our race, and the administration of our country which was indicted in the opening speech of the Mover of the Motion. The hon. Member made it clear that he would have no track with the kind of policy which is in vogue in the dictatorial countries. The Mover of the Motion made it clear where he stood. It is common knowledge in the House that he and a small section of his friends stand for a dictatorship of the working classes. He is most closely associated with the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps), and has definitely expressed his opinion, with, I think, the sympathy of quite a number of his colleagues, that, if ever a Socialist Government is returned again in this country, we shall become ciphers in this House and it will take powers by an enabling Bill to carry out in a dictatorial administration the work it desires. I am glad that the hon. Member for Shettleston, although he attacked the police in some respects in Scotland, had the fairness to say that on several occasions he had seen the police behave with fairness and courtesy.
I regretted the assault on the police by the Mover of the Motion. When he made that attack on the police in London I do not think that he had the sympathy of more than two or three Members in the House. It will be a bad day for this country if we allow attacks to be made on those who cannot defend themselves in this House, on a force which is one of the prides of our national life and the envy of the whole of the civilised world. The hon. Gentleman is most closely associated with that movement which has endeavoured to persuade his colleagues sitting on those benches to become locked in a permanent embrace with Communism, and when he stands up in this House to demand that we should have greater freedom, that we should preserve the liberties of the people, it is indeed surprising.
Had there been time, I should have liked to give a few facts with regard to


the Russian constitution and the recent events in that country. I have time enough, however, to say that a constitution has been initiated in Russia which, when it is read, must find the sympathetic support of every democrat in this House. When we read that constitution we read how everyone is to have a vote, how everyone is to have free expression of speech, and so on; and then we see the election taking place. In that election 1,140 seats were fought in Russia and in only one place was an opponent allowed to stand against the nominee of a caucus of gentlemen who were appointed to carry out the electoral machinery. The returning officers nominated and planted in every constituency in the country only one candidate. Am I wrong when I say that had anyone dared to oppose that one candidate he would have certainly been cast into prison, and most likely have suffered death?

Mr. G. Strauss: That is quite wrong.

Sir H. Croft: I have not time to deal with the matter fully, but I would simply refer hon. Members to the "Daily Herald" of last Monday, where, in a leading article, it said:
He would certainly lose his freedom and he would be extremely lucky not to lose his life.
This is the organ which represents the views of the hon. Gentleman.

Mr. Strauss: The hon. and gallant Gentleman is misquoting. He is quoting only one sentence.

Sir H. Croft: Every word I have said has come from the article in the "Daily Herald." I took the trouble to learn it.

Mr. Strauss: To read one sentence out of the context means nothing.

Sir H. Croft: I shall be pleased to leave it to the judgment of any man. I do not want to advertise the "Daily Herald," but I would ask hon. Members to read the "Daily Herald" of last Monday, and they can judge for themselves whether I have misquoted one word from that eloquent, devastating article. If there is any difficulty in finding it, it is exactly on a level with an excellent photograph of the Leader of the Opposition addressing Spanish soldiery with fixed bayonets, no doubt explaining to them how great are the liberties in this country.
I have been in political life for 30 years. I have spoken as much in London constituencies as any man in this House during that time. In the East, in parts of the North, and in South London I have very rarely seen fair treatment given to speakers. [HON. MEMBERS: "Nonsense!"] I am speaking about what is known to every London Member, and I have very rarely seen any speaker on the Conservative platform receive fair treatment. It is, therefore, rather strange to find how those who advocate these movements in parts of London squeal on the first occasion when they are resisted. If there is any hon. Gentleman who feels, as I do, that Fascist processions ought not to be allowed when the people are in uniform and wearing the insignia of a foreign system which is detested by nearly all of us, I would also urge them next year to do as I did on May Day and have a close-up of the Communist procession in London. They will see red flags, which are not emblems of our country, carried in the procession through the West End in just as provocative a manner as those processions in the East End; they will see men walking with clenched fists, which is not a British gesture; and they will see again and again efforts made to show those in the districts through which they are marching that there is a general desire to bring to an end the constitution of this country, and to disrupt British society.
The vast mass of these people are not typical British men. If you examine them closely you will see that the overwhelming majority are clearly those who, in comparatively recent years, have come from foreign countries, many of them being refugees or sons of refugees who had fled to the one free country in the world. It ill becomes the champions of that population in London to come here and impugn the liberties of this country. I speak as one whose forebears have more frequently been Members in this House, perhaps, than those of any other Member, and I say that we can still thank God for our liberties. Through all the centuries this country has been free, and to-day still our liberty is the most precious thing we possess. We refuse to be driven to the beliefs of those members who so closely sympathise with the systems in foreign lands.

10.5 p.m.

Mr. Holdsworth: I want to try and present in the space of 10 minutes what I would like 10 hours to say. I want to say one word about the speech of the hon. Gentleman who moved this Motion. I regret very much his biased references to the police. It seems to me to be perfectly futile to take one or two particular instances by one or two individuals and then to stigmatise the whole of the wonderful Metropolitan Police. I do not align myself for one moment with the suggestion that they are partial and that they treat one section of the community differently from another.
I want to go on to one or two points raised by the hon. Member for Norwich (Mr. H. Strauss). I think everyone will agree that he made a very remarkable speech. With every general contention I find myself in agreement, but there is one thing on which I find myself rather in disagreement, and that is what he said with reference to the book "The New Despotism"—that during the past few years there had been less interference by Parliament than formerly with individual liberties or by Ministers taking unto themselves certain powers. I do not think that that can be justified. I believe that almost every week in this House the Executive is usurping the functions of Parliament. I believe also that to a large extent ordinary Members of Parliament have become correspondence clerks and mere voting machines. Every question is made a Vote of Confidence by the Executive. The power of the Whip enforces the decision. It is true that now and again Members have courage to express their real convictions. It used to be said, and I think Lord Hewart laid down this contention, that the task of the Executive was to govern the country and that the task of Parliament was to make laws, but as a matter of fact what happens is that the Executive does both. It governs the country and makes the laws. It simply presents to Parliament its decision, and everyone has to troop into the Lobby behind them. [An HON. MEMBER: "Not everybody."] I think it is a thing that is generally true.
There is another fact to which I want to draw the attention of the House, and that is the extent to which the House is delegating its powers to outside bodies. There is the Import Duties Advisory Committee. The hon. and learned Member

for Leicester, East (Mr. Lyons) put a question to-day about the refusal of the Import Duties Advisory Committee to grant a duty on hosiery. These people are permitted by a power which we gave them to turn down this application. That power has been given by this House. They have also the power to decide the structure of the steel industry. The Unemployment Assistance Board took away the obligation of the Minister to answer personally questions with regard to the regulations drawn up. The Traffic Commissioners can deprive a man of his business. The Marketing Board is a producers' monopoly. They restrict production, and they have the power to inflict fines on the people who do not obey their behests. The Coal Bill gives power of compulsory amalgamation. All these are infringements of civil liberties.
We object to dictatorships in this country, we say, because of one reason, that they govern by decree. Are we not doing the same? There are mountains of rules and orders and regulations passed every year. A regulation is laid on the Table of the House, and the opportunity of discussing it is after 11 o'clock at night, without any opportunity of amendment. You take the lot or leave it, and we are handing over more and more every year the power of this House to a bureaucracy. My contention is that there is far too much legislation and far too many officials, and we are creating them by every Act of Parliament that we pass in this House. More and more we are giving to outside bodies the powers that we ought to use in this House. I should like to ask the Members of this House to spend four or five hours in the Library reading some of the Statutes which we have passed. They would be astounded at the number of times one comes across these words:
'As the Minister thinks fit'; 'except in so far as the Secretary of State otherwise directs';' may, by Order, make such provision as seems to him to be necessary.'
You go further. The hon. Member for Norwich said that that is not being done lately. It has been done under an Act this year—the Harbour, Piers, and Ferries (Scotland) Act, 1937. That gave power to the Minister to appoint an individual who in that particular Section to which I am referring had power to call upon people to give evidence on oath. He could choose his witnesses. He could


say, "I will have 'A,' but I will not have 'B'." He has complete power to do as he likes, without application of the rules of evidence, and no obligation to listen to evidence except as he thinks fit. The regulations which we are continually passing in this House have the force of a Statute. In practice these regulations are not drawn up by the Minister. They are drawn up by some individual in the Department. I should not like it to be thought that I am criticising the Civil Service. The people whom I am criticising are the Members of Parliament for giving them that power. The whole practice is a farce and a sham. There is a new despotism going on. I am certain that on all sides of the House we believe in liberty. I believe that all of us, and none more than the Socialists, believe in individualism, but we are all subscribing to doing away with it. It is time that the Members of this House really recognised the huge bureaucracy that we are creating. I would like to see a Standing Committee set up to whom all these regulations could be sent, so that they could be fully examined.
The hon. Member referred to the Incitement to Disaffection Act as it was passed. If I had had time, I should have liked to refer to the Bill as it was presented to the House. On the information of a common informer—mere suspicion—only suspecting that a man had done something—on giving information to one justice of the peace—a justice of the peace could issue a warrant to search the man's premises and to search his person—merely on suspicion. It is no good the hon. Member for Norwich saying that in the last few years this sort of thing has not occurred. It is true that the Attorney-General at that time, now the Minister for the Co-ordination of Defence, met us in a very splendid manner during the Committee proceedings on that Bill, and I ought to pay my tribute to him, but as the Bill was drawn up it was an absolute threat to the very foundations of British justice. The defendant had to prove his innocence, not the prosecution his guilt.
I believe that this country is the greatest country in the world. I believe there is here the greatest amount of liberty in the world. That is not due to accident, but to the safeguards provided by the sovereignty of Parliament and the rule of law, and they have both been

broken by the present trend of legislation. The guarantee of civil and religious liberty is in the hands of Members of this House. The price of liberty is eternal vigilance. It is our duty to practise it.

10.16 p.m.

The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): When the House discusses questions of public order and of civil liberties, I think it is the general sense of the House to take a House of Commons rather than a partisan point of view. At any rate, that was the practice when we passed the Public Order Act last year. But I think I am not doing the hon. Member who moved this Motion an injustice when I say that his speech was not merely a partisan speech in the ordinary sense, but that it was a bitterly partisan and sectional speech, for which he seemed to have searched records of every kind over several years to find everything that could possibly be raked up which might be discreditable to the Metropolitan Police. The hon. Member may not agree with that, but that is my impression, and the House can judge between us. I think it is true to say that the hon. Member has not today carried the House with him in his condemnation of the Metropolitan Police. I do not propose to go into those matters in very great detail, except on certain specific points raised by the hon. Member, but although he is a very suspicious person I will say that he did me, at any rate, the courtesy of saying that I had not got any pro-Fascist sympathies. I, therefore, hope that he will realise, whatever suspicions he may entertain elsewhere, that there is, at any rate, somebody in a certain position of authority in the Home Office who is decisively not pro-Fascist.
He very much criticised the Home Secretary at the time of the Olympia meeting for what he said with regard to the rights of the police to enter public meetings, and also criticised the police for taking up a different attitude later. My hon. Friend the Member for Norwich (Mr. H. Strauss) has stated the position correctly in regard to that matter. The Home Secretary of that day stated that it was the view then held that the police could enter premises on which a meeting was taking place if they were invited to do so by the occupier, or if a breach of the peace was taking place. It was only


when the High Court took a different view, as a result of the case of Thomas versus Sawkins that the position was altered. That decision showed that the earlier view of the powers of the police, that they could not enter private premises merely on the apprehension that a breach of the peace was likely, was too limited, but that if they had reasonable ground to anticipate a breach of the peace it was within their power, and it was their duty, to enter. I think it will give the hon. Member some satisfaction to know that instructions have been issued to the police on the basis of this new ruling by the court to the effect that if for any reason the police have ground for believing that an unreasonable amount of force is being used by stewards at an indoor meeting, the police should take action promptly with a view to identifying the assailants if possible, or, at any rate, put a stop to any further assaults, and, further, that the police should not hesitate to enter a hall for this purpose whether or not persons ejected ask for their assistance.

Mr. G. Strauss: Is it carried out?

Mr. Lloyd: I think it is carried out, but if the hon. Gentleman has any specific complaint with regard to this I will certainly look into it.

Mr. Strauss: What about the Hornsey Town Hall and my speech—I wrote to the hon. Gentleman on the details of this case—when they refused to come in?

Mr. Lloyd: I could, if I had time, deal with the matter at length, and, I think, completely satisfactorily, but I want to pass on to other important matters. It is well that we should consider this matter of public meeting and police action in a proper perspective. I would like to tell the House that, during the year from December, 1936, to December, 1937, there were 3,094 Fascist meetings held in the Metropolitan area, 4,364 anti-Fascist meetings, and 4,553 meetings held under the auspices of other bodies, that is, a total of 12,011 meetings. The House will appreciate that the policing of those meetings imposes a terrific burden upon the police. Very few of those meetings have been interfered with by hte police. I think the following figures will show that the police carry out in a completely impartial spirit their primary duty of maintaining order and preventing breaches of

the peace. From the period 1st July, 1936, to 1st December, 1936, the police asked the promoters of only 20 meetings out of those 12,011 to close down the meeting, this action being taken because the crowd was getting out of hand, and because there was imminent danger of a breach of the peace.

Mr. Benjamin Smith: Were any of those meetings in South London?

Mr. Lloyd: I am afraid that I should require notice of that question. Of those 20 meetings, 13 were Fascist and only seven were anti-Fascist. On the question of the prohibition of processions in the East London area. It is true to say that the ban has, broadly speaking, general approval and I think also general approval in the district. I would cite only one opinion, that of Dr. Mallon, Warden of Toynbee Hall, who knows the conditions in the area as well as anybody. He says:
I do know the factors here, and I say that the extension of the prohibition is both desirable and necessary.
It is not necessary for me to labour the point, which was indeed so well made by the hon. Member for West Islington (Mr. Montague) when this question arose in another place, that there are very grave dangers indeed in making this ban an exclusive ban on one political organisation only. It might be of use to the House if I now considered the question which we are discussing to-day in rather more detail than is usual, and if I went into what I might describe as the machinery of British freedom. We all talk about it rather generally. That may be because, as Lord Baldwin has said, we take it for granted.
In the situation of the world as it is to-day I think I might go in rather more detail into this matter if the House will permit me, and to go right back to the first principles. We have all heard in our school books about Magna Charta, and most of us who are not lawyers think of it as something which has passed into the limbo of history. That is not the case. Magna Charta to-day has the force of a Statute, and is recognised by the courts as part of the law of the land. We to-day still live under the provision of the Charter:
No freeman to be arrested, imprisoned … exiled or put upon in any way except by the lawful judgment of his peers or the law of the land.


The same is true of the Petition of Right and the Bill of Rights, 1689, which says:
The pretended power of suspending laws or the execution of laws by regal authority without consent of Parliament is illegal.
I can say that this is a provision, which, in the year 1937, everyone in the Home Office takes very good care never to forget. Broadly speaking, it is under the protection of those great Charters that we enjoy our civil liberty. Roughly they assure that Englishmen can do what they like without let or hindrance unless they break the law. Thus arise the three great civil rights.
The first is the freedom of discussion. There is no censorship whatever of the Press in this country, and there has not been any in peace-time for practically 250 years. We hope that there never will be, for the writers of a free Press act as the skirmishers and scouts of freedom. By a ruthless process they rout out and reveal hidden abuses or concealed oppressions. The second right is the right of public meeting, which in this country is universal and unfettered, provided always that the meetings are not unlawful assemblies, do not obstruct the free passage of the King's highway, and are not likely to lead to breaches of the peace. Thirdly, there is the right to personal freedom. This is, perhaps, the most fundamental right of all, and I would like to examine the position concretely. Of course, many Continental countries in the nineteenth century adopted general declarations of the rights of man, the freedom of the individual, and so on; but what is so impressive in the English system is that the great principles laid down in the charters of English liberty are backed up by a whole series of practical legal processes for securing their effective enforcement.
First of all, there is, of course, the famous writ of Habeas Corpus. This again is a process which many laymen had come to regard as rather an antiquarian curiosity, but, of course, every lawyer knows that it is nothing of the kind. The remedy is always available, and the High Court still has occasion from time to time to issue writs demanding that legal cause be shown in open court for the detention of the body of such-and-such a citizen in custody. As a matter of fact, only a few years ago a writ was successfully directed to the Secretary of State, with the result that the prisoner was released.
There are also two further types of remedy open to every person who thinks that he has been wrongly arrested or wrongly prosecuted, namely, a civil action or a criminal prosecution. A civil action for damages can be brought for wrongful arrest or for malicious prosecution, if it can be shown that prosecution took place without reasonable or probable cause. The remedy of a criminal prosecution would usually take the form of a charge of assault. Again I would like to emphasise that these are not merely theoretical rights; they are real rights which are exercised by the citizens of this country. I have before me a number of actual examples of the use of these processes, but I will not weary the House with them. All I would say is that, although I think the general sense of the House to-night has shown that no one would seriously suggest that the Metropolitan Police are performing their duties otherwise than in accordance with their traditional standards of impartiality, tact and forebearance, at present there are three actions by private persons pending in the High Court against the Metropolitan Police at this moment.
There are certain additional points which I think it is only right that we should all remember. In the first place, it is no defence in this country for a constable to plead the orders of his superior officer. The only justification for interference with the private rights of the citizen by the police or anyone else acting on behalf of the executive is a defence recognised by law; and, secondly, that defence has to be made, not in some special administrative court, allowing perhaps special rights to officials, but in the ordinary open law courts of England, that is to say, law courts in which questions of law are finally decided by judges irremovable except on a substantive Motion of both Houses of Parliament, and where questions of fact are decided by 12 ordinary English citizens.
Let me sum up the position by giving a quite imaginary instance. If, for example, a constable or any officer or official of the Government were to arrest any individual unlawfully, even if the arrest were effected on instructions from higher authority, even if he were acting on the orders of a chief constable, even if the chief constable were carrying out the wishes of the Home Secretary or the


Prime Minister, everyone, from the Prime Minister downwards, who could be proved to have had any responsibility for that unlawful act, would be answerable in the courts, would be triable before a jury of ordinary citizens, and would be liable both to be punished for his wrongdoing and to pay compensation to the individual wronged.
In this country no man is above the law, but every man, whatever his rank or condition may be, is subject to the ordinary law of the land and the jurisdiction of the ordinary courts. Our civil rights, therefore, exist because the courts will bring to book anyone, whatever his position, whether he be a private person, village constable, or Minister of State, who unlawfully interferes with any of us. I am not going to make any comparison with foreign countries. No comparisons are necessary. These are, indeed, great and formidable engines of liberty. They are available to everyone, they operate powerfully and easily, and, above all, they work without the favour, and indeed, if necessary, in spite of the opposition of, the executive Government of the day. Behind this automatic apparatus of liberty stands, of course, the supreme guardian of freedom, the sovereign Parliament. I would not venture, in this House, to go into details, but I think it is worth while to observe that it acts broadly in two ways: first, by supervising the actions of the Executive and, secondly, by its effective power of investigating any grievance whatsoever that arises in the State. It is not for me to address the House in any detail on the subject, but I do say, as a young Member, that the exercise of these powers is still a vital reality to-day. I think there is nothing about which the House is so easily or quickly roused as a threat to individual liberty.
I remember an instance which took place only a few years ago, and which is within the recollection of hon. Members. There was a case in which a young flying officer was found in the streets of London in the early hours of the morning carrying an attaché case. He was suspected of being a thief by two plain-clothes policemen who approached him. He, on the other hand, thought they were bandits. In the upshot, after a struggle, he was removed

to a police station where it was eventually realised that he was not a thief, and he was released. The matter was raised in the House, and the Home Office spokesman replied regretting the incident but justifying police action. The House was immediately aroused. Member after Member rose, without distinction of party, and pressed the Government to give more weight to the flying officer's statements and to reconsider the position. In a few hours, the Secretary of State undertook that the Commissioner of Police himself should see the flying officer and himself make a special investigation. This was done. The Commissioner made a full apology to the flying officer and announced that as a result of his inquiry he had decided that the sergeant of police was wrong in not apologising at the time. Further, a defect in procedure had come to light and a new standing order would be promulgated, providing that in future all cases of this kind should at once be reported to superior officers.
I have ventured to describe some of the main features of the actual organisation of British liberty; but what of the spirit that lies behind our system, and has been the vital force in creating it? We all know that our system has not come into existence as a result of the ukase of a leader or the decree of a President. It has grown down the years, and has been created by the handiwork of countless individual Englishmen. I think the Master of Balliol comes near to the heart of the matter when he emphasises the vital importance of the part which has been played by ordinary local life in the formation of the English political temperament. These are his words:
Nowhere was the village community so real and enduring a thing as it was in England for at least twelve centuries of its history. In every parish men met almost daily in humble, but very real self-government, to be judged by their fellows, or fined by them, or punished as bad characters; to settle the ploughing times and harvest times, the fallowing and the grassing rules for the whole village. To these twelve centuries of discipline we owe the peculiar English capacity for self-government, the enormous English development of the voluntary principle in all manner of institutions; and lastly the spirit of co-operation, the spirit of fair-play and give-and-take, the habit of working to a given purpose, which tempered the hard and grim individuality of the national character.
Our people to-day, for the most part, no longer live in villages. The vast majority


live now in the great towns. But I am going to say that anyone who has any intimate knowledge of the social life of the masses of our people in the great cities will agree that the old spirit lives on among them to-day. Lord Baldwin not very long ago referred to the training which our people daily receive in the art of self-government in the local branches of the great friendly societies, the trade unions and that immense variety of voluntary associations which flourishes among our people. I know from my own experience in Birmingham—and, of course, many hon. Members opposite know even more intimately—how well, broadly speaking, these concerns are managed by our people. There is at once both a great measure of freedom and equality, and at the same time a respect for the authority of the leaders who emerge naturally from the general body. Also, nowhere is it possible to find a greater respect for the rules of order. I am not speaking from hearsay, but from my recollection of meeting after meeting of working men in the city of Birmingham, and it is my conviction that the temperament of our people is profoundly practical and constitutional.
But what we are all most interested in is the future. I put it to the House that it is no good our beating about the bush or evading realities at a time like this. The truth is that history does not tell of any democracy that has survived. Of course, a statement of this kind made only a few years ago would have sounded very academic and theoretical; but it does not sound quite so theoretical to-day. We are in the presence of new factors, and I suggest that two of them are of major importance. First, in recent years, by two great extensions of the franchise—which have always been regarded in the past as in themselves great extensions of political liberty—this House is now elected by what is practically universal franchise, and, therefore, from that point of view, we have attained to full democracy. Secondly, we have seen the fall and ruin of the democratic systems of continental countries.
I put it to the House that we ought to face the difficulties. Our prudent course is to take the view that Lord Baldwin took, when he said that democracy is the most difficult form of government, and to be ready to learn the vital lessons afforded by the practical experience of

democratic breakdown in other countries. What is the essential problem of democratic Government? I believe it can be stated quite generally. It is the difficulty of achieving a proper balance between freedom and order. Both are fundamental and eternal principles in the life of organised communities. Lord Baldwin stated the problem with conclusive brevity, when he said:
Freedom without discipline soon degenerates into licence, by which many a State has perished. Discipline without freedom will make in time a nation of slaves.
Again and again in the last few years we have seen in other countries what a deadly danger to liberty is widespread public disorder. In the end, people will accept anything, they will swing to any extreme, they will accept any dictator to restore that principle of order, without which no tolerable life is possible in any society. That danger we must avoid at all costs. I think we must equally avoid the philosophy that has invested these proceedings with intellectual support, namely, that the individual is really only a cog in the machine because the State itself is the only entity which possesses a fundamental moral value. Englishmen, I think, will always find more attractive the great alternative principle enunciated long ago by an old Puritan militia colonel, when he said, in quaint Commonwealth English:
Really the poorest he that is in England hath a life to live as the richest he.
I make no excuse for reading to the House the Master of Balliol's comments on this sentence, because they are so apt to my theme and, as I think, so important:
That seems to me the authentic note of democracy. The poorest has his own life to live, not to be managed or drilled or used by other people. His life is his, and he has to live it. None can divest him of that responsibility. However different men may be in wealth or ability or learning, whether clever or stupid, good or bad, living their life is their concern and their responsibility. That is not a scientific nor a common-sense doctrine. It is a religious and moral principle.
Therefore, I recommend the House to support my hon. and gallant Friend's Amendment, because I think that is the best way to make clear to everyone that while we are very ready to learn practical lessons from whatever we may see going on in the world, it is our fundamental aim and determination that England shall remain a free and Christian country.

10.41 p.m.

Mr. Ammon: In our endeavour to see that as many hon. Members as possible should take part in the Debate the Under-Secretary and I came to a decision to shorten our contributions. I have no objection to the Under-Secretary's general statement of the principles of liberty and law in this country, but I want to analyse some of his statements. We have had a good deal of criticism about Socialism to-night, and the hon. Member clinched his argument by quoting a statement from a Socialist, the Master of Balliol.
I should like to repudiate the suggestion that from this side of the House there has been any general attack intended on the police of this country or the police of London. What my hon. Friends have done is that they have drawn attention to certain abuses of police powers, and every case quoted has been a well-authenticated case which has come before the courts and the courts have decided that the police were in the wrong. Our action in moving the Motion and raising the discussion is not because we are in any way less jealous of the hard-won liberties that have been built up for centuries in this country, but because probably we are more jealous of their invasion than are the members of other parties in this House.
There is no point in the hon. and gallant Member for Chippenham (Captain Cazalet) and the hon. and gallant Member for Bournemouth (Sir H. Croft) quoting the difference in rules and practices that obtain in other countries. We are not concerned about the position in other countries. What we are jealous about is that the liberties of this country shall not be invaded or violated. In regard to the Olympia case, which has been quoted, one hon. Member who preceded me deserved praise for the speed with which he wrote to the "Times" and called attention to the abuses of the liberty of the subject which had taken place. The other cases quoted, Stepney Green. Golders Green and Hyde Park, were brought before the courts and dismissed. I have one comment to make on the statement of the Under-Secretary as to the right of civil action for everybody. It is quite a different thing when a humble unknown working man tries to exercise that right. It was proved that these people received brutal treatment at the

hands of the police, and the matter was afterwards adjusted by the courts. With regard to the case of the young flying officer, to whom justice was done after his case had been brought before this House, one wonders whether he would have obtained it if he had been an ordinary working man who had been coming home late at night, and had been accosted by the police, as happened in this particular case.
The hon. Member for Norwich (Mr. H. Strauss) made a reference to the inquiry into the Thurloe Square riot, and said that it only aroused derision in the mind of anyone with any legal knowledge or training. It does not lie in the mouth of the hon. Member to cast aspersions of that kind. The Chairman of that Committee was a man of legal eminence and experience which largely outweigh that of the hon. Member for Norwich. The hon. and gallant Member for Bournemouth complained that my hon. Friends had raised a question of the conduct of the police. As one who has done as much street-corner speaking as most people, I can give testimony to the general fairness and decency of the London police, but these cases do occur, and we are concerned about them. We feel that there are other elements in the ranks of the police which are somewhat spoiling the old-fashioned police force. And surely the hon. and gallant Member will realise that this is the only court of appeal. This is the only place where we can call attention to these abuses in the hope of getting them remedied. To say that the hon. Member for North Lambeth (Mr. G. Strauss) has brought wholesale charges against the police is absurd and without any foundation. We think there is something to be considered. In an editorial in the "Times" to-day they deal with this Debate and suggest the lines upon which they hope the Debate will proceed, that is, of discussing the thesis laid down by the Lord Chief Justice in his book, "The New Despotism." They say this:
It is possible, however, that he is not concerned with any dangerous developments in Parliamentary procedure but only with the more trivial checks upon the liberty of the subject which can be applied under such measures as the Sedition Act or the Public Order Act.
There is an admission in that statement in the "Times" that there have been


invasions of the liberty of the subject. I am pointing these things out, not as an attack on the police, but because I think a certain amount of slackness has crept in in some directions. Only yesterday I read a report of a woman who was charged with stealing, and upon the evidence given in court it was found that the inspector in charge of the case inquired of her whether she had had immoral relations with the prosecutor in the case. The magistrate said that it was utterly improper and contrary to all rules that any such question should be put. But it is done. These are the things to which we desire to call attention in the hope that they will not continue. Only a short time ago an hon. Member called attention to the brutal treatment of prisoners in one of His Majesty's prisons. It is true that through the action of the Home Secretary swift and condign punishment was meted out, but it does not do away with the fact that there is an alarming increase of these cases. I do not stigmatise the whole of the police, but I mention these facts in order that the reputation of the police force may be saved from the besmirchings which have fallen upon it quite recently.
But there is one aspect of the case with which we are very much concerned, and that is the question of search by the police without warrant. That has been commented on by the Royal Commission on Police Powers. The House will be familiar with one case, that of the hunger marchers, when the present President of the Board of Trade, who was then Under-Secretary to the Home Office, said that the police were perfectly right in the action they took. Afterwards we found that the Minister's statement was wrong, because when the case was taken to the courts the judge stated that such things should not take place. The paragraph of the report said that it was never contemplated that the police should have the right to invade people's homes in order to search for papers to bring charges against them which might be different from the original charge against them.
The hon. Member has quoted quite a number of statements, with which we all agree, as to the way in which our liberties have been built up over the centuries. I will quote a statement made by President Woodrow Wilson when addressing the New York Press Club in 1912, but which is as germane to-day as ever

it was. None of these liberties, he said, had been given to the people at large by those who have been in positions of place, power and authority. Every one had to be fought for by the people. In calling attention to that, President Wilson said:
Liberty has never come from the Government. Liberty has always come from the subjects of it. The history of liberty is a history of resistance. The history of liberty is a history of limitations of governmental power, not the increase of it.
While it is quite true, as the hon. Gentleman has said, that we have built up through all the centuries a magnificent body of judicial rights and civil rights in this country, nevertheless their administration is to a very large extent determined by economic conditions, and that is one of the things against which we have to be constantly on guard. I will quote somebody from whose opinions, I am sure, there will be no dissent on the opposite side of the House. About 100 years ago this country was going through a period of disturbance very much like that which it is going through now. Changes of opinion and changes in economic conditions were taking place, and methods to quote such were adopted about which there is complaint now. One of my hon. Friends interjected a reference to Peterloo. That is one of the milestones; and Disraeli in those days when they were fighting for civil rights said:
The real cause of this—as of all popular movements not stimulated by the aristocracy … is an apprehension on the part of the people that their civil rights are invaded.
That fight for civil liberty has gone on without ceasing and without any relaxation down to the present time. To-day the fight is still as necessary as it was then. In a variety of ways, as has been testified in many parts of the House, there have been invasions of the rights of the subjects and limitations imposed here and there. Everybody admits that, paradoxical though it may seem, limitations very often give the subject a larger amount of liberty. That is so in cases of the individual where the licence interferes with the common good of the people. But it is an entirely different thing when people in authority interpret and administer the law in such a way as to deny to the mass of the population those hard-won rights and liberties which are their inheritance. Again I quote from Disraeli:
Before the House agrees to any one of the projects of the Noble Lord"—


it was a Whig Government in office at that time—
we ought to inquire into the causes of the insurrectionary spirit and whether the Government is concerned in that insurrectionary spirit. How can we tell that the cause of it may not be the country having to struggle with a weak Government?
There was never a quotation that was more applicable to the present position. In conclusion, I want to say that the conceptions of liberty of hon. Members on this side are as expressed in the Motion, which I think should gain the assent of the whole House, and not that persons clothed with brief authority should so exercise that authority chiefly to maintain their position, nor to be so partial in their administration of the law as to cause those who might differ from the Government or administration to go in

fear of reprisal or punishment because of such difference. In some quarters there has been a tendency to depart from that principle, but I hope that this Debate to-night will go very far to prevent any spread of that tendency. I close by saying that hon. Members on this side, even more than hon. Members opposite, because we have most to defend, are jealous of those liberties which have been won through the centuries and which are dear to this country. We are determined that they shall be maintained unimpaired and handed down to succeeding generations as we have them to-day.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 92; Noes, 124.

Division No. 63.]
AYES.
[11.1 p.m.


Adams, D. M. (Poplar, S.)
Groves, T. E.
Parker, J.


Adamson, W. M.
Halt, G. H. (Aberdare)
Pethick-Lawrence, Rt. Hon. F. W.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hall, J. H. (Whitechapel)
Richards, R. (Wrexham)


Ammon, C. G.
Hardie, Agnes
Riley, B.


Anderson, F. (Whitehaven)
Hayday, A.
Ritson, J.


Attlee, Rt. Hon. C. R.
Henderson, J. (Ardwick)
Roberts, Rt. Hon. F. O. (W. Brom.)


Banfield, J. W.
Henderson, T. (Tradeston)
Sexton, T. M.


Barr, J.
Hills, A. (Pontefract)
Silverman, S. S.


Batey, J.
Jagger, J.
Simpson, F. B.


Bellenger, F. J.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Benson, G.
Johnston, Rt. Hon. T.
Smith, E. (Stoke)


Bromfield, W.
Jones, A. C. (Shipley)
Smith, L. W. (Hallam)


Brown, Rt. Hon. J. (S. Ayrshire)
Kennedy, Rt. Hon. T.
Sorensen, R. W


Buchanan, G.
Kirby, B. V.
Stephen, C.


Burke, W. A.
Kirkwood, D.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cape, T.
Lathan, G.
Taylor, R. J. (Morpeth)


Charleton, H. C.
Lawson, J. J.
Thurtle, E.


Cluse, W. S.
Leach, W.
Tinker, J. J.


Cooks, F. S.
Leslie, J. R.
Watkins, F. C.


Cove, W. G.
Lunn, W.
Watson, W. McL.


Cripps, Hon. Sir Stafford
McEntee, V. La T.
Welsh, J. C.


Davidson, J. J. (Maryhill)
McGovern, J.
Westwood, J.


Davies, S. O. (Merthyr)
Maclean, N.
Whiteley, W. (Blaydon)


Dunn, E. (Rother Valley)
MacNeill Weir, L.
Williams, E. J. (Ogmore)


Ede, J. C.
Mainwaring, W. H.
Williams, T. (Don Valley)


Edwards, Sir C. (Bedwellty)
Mathers, G.
Wilson, C. H. (Attercliffe)


Fletcher, Lt.-Comdr. R. T. H
Maxton, J.
Windsor, W. (Hull, C.)


Frankel, D.
Messer, F.
Woods, G. S. (Finsbury)


Gardner, B. W.
Muff, G.
Young, Sir R. (Newton)


George, Megan Lloyd (Anglesey)
Naylor. T. E.



Grenfell, D. R.
Noel-Baker, P. J.
TELLERS FOR THE AYES.—


Griffiths, J. (Llanelly)
Paling, W.
Mr. G. Strauss and Mr. Aneurin




Bevan.




NOES.


Acland-Troyte, Lt.-Col. G. J.
Cobb, Captain E. C. (Preston)
Emrys-Evans, P. V.


Albery, Sir Irving
Colville, Lt.-Col. Rt. Hon. D. J.
Errington, E.


Allen, Lt.-Col. Sir W. J. (Armagh)
Croft, Brig.-Gen. Sir H. Page
Erskine-Hill, A. G.


Aske, Sir R. W.
Crooke, J. S.
Everard, W. L.


Assheton, R.
Croom-Johnson, R. P.
Fleming, E. L.


Astor, Hon. W. W. (Fulham, E.)
Crowder, J. F. E.
Furness, S. N.


Baxter, A. Beverley
Denville, Alfred
Fyfe, D. P. M.


Birchall, Sir J. D.
Dodd, J. S.
Graham, Captain A. C. (Wirral)


Bossom, A. C.
Dugdale, Captain T. L
Grant-Ferris, R.


Briscoe, Capt. R. G.
Duncan, J. A. L.
Greene, W. P. C. (Worcester)


Brown, Col. D. C. (Hexham)
Eastwood, J. F.
Grimston, R. V.


Brown, Brig.-Gen H. C. (Newbury)
Eckersley, P. T.
Hannon, Sir P. J. H.


Butcher, H. W.
Edmondson, Major Sir J.
Harbord, A.


Carver, Major W. H.
Elliot, Rt. Hon. W. E.
Harvey, T. E. (Eng. Univ's.)


Channon, H.
Elliston, Capt. G. S
Heneage, Lieut.-Colonel A. P.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Emery, J. F.
Hepburn P. G. T. Buchan-




Hepworth, J.
Markham, S. F.
Samuel, M. R. A.


Herbert, Major J. A. (Monmouth)
Mayhew, Lt.-Col. J.
Sanderson, Sir F. B.


Higgs, W. F.
Mills, Major J. D. (New Forest)
Savery, Sir Servington


Hills, Major Rt. Hon. J. W. (Ripen)
Moore, Lieut.-Col. Sir T. C. R.
Selley, H. R.


Hoare, Rt. Hon. Sir S.
Muirhead, Lt.-Col. A. J.
Smith, L. W. (Hallam)


Holdsworth, H.
Munro, P.
Somerville, A. A. (Windsor)


Holmes, J. S.
Nall, Sir J.
Strickland, Captain W. F.


Hope, Captain Hon. A. O. J.
O'Connor, Sir Terence J.
Stuart, Lord C. Crichton- (N'thw'h)


Horsbrugh, Florence
O'Neill, Rt. Hon. Sir Hugh
Sueter, Rear-Admiral Sir M. F.


Hutchinson, G C.
Orr-Ewing, I. L.
Tasker. Sir R I.


Jones, L. (Swansea W.)
Patrick, C. M.
Thomas, J. P. L.


Kerr, H. W. (Oldham)
Petherick, M.
Tree, A. R. L. F.


Keyes, Admiral of the Fleet Sir R.
Pickthorn, K. W. M.
Tufnell, Lieut.-Commander R. L.


Lamb, Sir J. Q.
Porritt, R. W.
Ward, Lieut.-Col. Sir A. L. (Hull)


Lees-Jones, J.
Procter, Major H. A.
Ward, Irene M. B. (Wallsend)


Levy, T.
Radford, E. A.
Waterhouse, Captain C.


Liddall, W. S.
Rankin, Sir R.
Wedderburn, H. J. S.


Little, Sir E. Graham-
Reed, A. C. (Exeter)
Whiteley, Major J. P. (Buckingham)


Lloyd, G. W.
Reid, W. Allan (Derby)
Windsor-Clive, Lieut.-Colonel G.


Loftus, P. C.
Rickards, G. W. (Skipton)
Winterton, Rt. Hon. Earl


Lyons, A. M.
Ropner, Colonel L.
Womersley, Sir W. J.


MacDonald, Sir Murdoch (Inverness)
Ross Taylor, W. (Woodbridge)
Young, A. S. L. (Partick)


McEwen, Capt. J. H. F.
Rowlands, G.



McKie, J. H.
Royds, Admiral P. M. R.
TELLERS FOR THE NOES.—


Magnay, T.
Russell, Sir Alexander
Captain Cazalet and Mr. H.


Makins, Brig.-Gen. E.
Salmon, Sir I.
Strauss.


Margesson, Capt. Rt. Hon. H. D. R.
Salt E. W.



Question, "That this House do now adjourn," put, and agreed to.

Question proposed, "That the proposed words be there added."

Mr. Tinker: rose—

It being after Eleven of the Clock, the Debate stood adjourned.

Orders of the Day — POOR LAW (AMENDMENT) (No. 2) BILL.

Considered in Committee.

[Captain BOURNE in the Chair.]

CLAUSE 1.—(Power of Poor Law authorities to grant personal allowances to certain inmates aged sixty-five or upwards of Poor Law institutions.

11.7 p.m.

Major Whiteley: I beg to move, in page 1, line 16, after "1937," to insert:
or who is in receipt of an ex-service man's disablement pension.
I move this Amendment in order to be assured that the position of the ex-service men is completely safeguarded.

Miss Ward: I am glad my hon. and gallant Friend has raised this question so that I can deal with it, because I know that everybody wishes to safeguard the interests of the ex-service men. The position is this—[HON. MEMBERS: "Agreed."] This Amendment has been moved in order to get an assurance, and I thought I had the right to explain what the position was.

Mr. Buchanan: The hon. Member will only block her own Bill.

Major Whiteley: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

CLAUSE 2.—(Application to Scotland.)

Amendment made: In page 1, line 23, leave out paragraphs (a) and (b) and insert:
(a) For any reference to the council of a county or county borough there shall be substituted a reference to a county or town council."—[Miss Ward.]

Clause, as amended, ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Bill reported, with an Amendment; as amended, to be considered To-morrow, and to be printed. [Bill 69.]

The remaining Orders were read, and postponed.

Orders of the Day — SPECIAL CONSTABLE, HARTLEPOOL.

Motion made, and Question proposed, "That this House do now adjourn."—[Captain Hope.]

11.11 p.m.

Mr. Benjamin Smith: We have listened to-night to a Debate on the liberties of the people in this country. We have heard arguments pro and con. To-night


I wish to bring to the House a case where, I submit, the liberty of the subject has been invaded, and by authority. I refer to the case of Mr. Lant. On the 9th of this month I asked the Home Secretary the following question:
Whether he is aware that Mr. Lant, an employé of the West Hartlepool trackless undertaking, was ordered to attend before a justice of the peace of the Borough of Hartlepool to be sworn in as a special constable, and was compelled to sign the required declaration, although he had not volunteered for this service."—[OFFICIAL REPORT, 9th December, 1937; cols. 551–2; Vol. 330.]
I asked him under what authority this was done. The substance of the reply of the right hon. Gentleman was that this man was brought up under Section 196 of the Municipal Corporations Act, 1896, that Lant was notified before his name was submitted to the justices, that Lant raised no objection, and that had he objected his name would not have been submitted to the justices. In reply to a supplementary question, the right hon. Gentleman further said that Lant was informed, and that it was when he was called upon to make the declaration that Lant raised his objection. So that Lant did, in the Home Secretary's own words, object to being called up. Further, it was stated that after discussion with the justices and hearing the questionnaire, Lant agreed to sign the declaration and to be excused next year.
In my submission the Home Secretary was incorrectly informed on this matter. The facts are as follows: On 26th September Police Constable Whitehead, of the Hartlepool police, called at the home of Lant and inquired of his wife what was her husband's age. On being told "38," the constable said, "We are going to make a special constable of him." On Friday, 8th October, Lant found a summons in his letter box demanding his appearance at the Borough Hall on 11th October at 5.15. On the 9th he went to the police office and asked to see the chief constable. He was told he was out. He then left a message that he would be at work at the time stated in the warrant, and that he did not want to be a special constable, as it would interfere with his other work, his other work being branch secretary of the Transport and General Workers' Union, which I have the honour to serve. He was told that no excuse would be taken except ill-health.
On Monday, 11th October, a constable called upon him and told him to be at the police station at 10 o'clock on Tuesday, the 12th. He was there taken by Inspector Walker to the magistrates' room. He was met by the magistrates' clerk, and Mr. T. Smith, J.P. He again protested against being compelled to act as a special constable and asked to be shown the Act under which he was to join up. The magistrates' clerk showed him a copy of the summons and demanded that he should sign the declaration forthwith. Lant again refused, and was told by Mr. Edgerley that he would be taken to court and that a penalty of £5 would be imposed on him at once. Lant protested most strongly at this. The magistrates' clerk said, "I see your point of view as to your objection." Lant thereupon asked to be relieved of any obligation to serve. The magistrates' clerk said there was nothing to do but to take Lant into court. These are statements of the man himself and I am willing to produce him if it is necessary that evidence should be given. He then signed a declaration under protest. At no time has he ever agreed to be a special constable.
I wish to ask under what powers Lant was called up. It appears that there are at least four Acts of Parliament dealing with special constables, two of them with voluntary constables. There are the original Special Constables Act of 1831; the Municipal Corporations Act of 1882; the Special Constables Act of 1914 and the Special Constables Act of 1923, amending the Act of 1914. The first of these Acts gives the justices of the peace power to appoint special constables in any parish, township or place within their jurisdiction in a case where tumult, riot or felony had taken place or was reasonably to be apprehended. That Act was passed in the old days of the rotten boroughs, before the Reform Act of 1832, and before municipal corporations as we know them were set up; before there was an adequate police force and in the days when parish constables were nothing but watchmen. In 1835, four years later, the reformed Parliament set about reforming the boroughs. It established municipal corporations as we know them, and in the Municipal Corporations Act, 1835, is a provision that the justices were to appoint special constables for their boroughs.
Section 83 of the Act of 1835 is to all intents and purposes the same as Section 196 of the Municipal Corporations Act, 1882, which the Under-Secretary quoted, under which the Hartlepool magistrates appointed Lant. The justices of the peace of Hartlepool have, therefore, taken action under the provisions of an Act which was passed 100 years ago, in the days of the rotten boroughs, to cure the pretty rotten system then prevailing. It was at a time when police forces were just being constituted. The Metropolitan Police had only been founded by Sir Robert Peel in 1829. It is an open question as to how far it was really necessary to include in the Consolidating Act of 1882 the old provisions relating to special constables which had been embodied in the Municipal Corporations Act.
In 1914 we had another Special Constables Act, which was passed for the period of the war, and again it was decided by an Order in Council that the Act of 1831 and Section 196 of the Municipal Corporations Act, 1882, were to be incorporated for the duration of the War. Then, in 1923, we had an amending Act, which stated that the provisions applied now not only to London but to all boroughs, and that they were to last, as it were, for all time, and it was to be on a voluntary basis.
In the case of Lant, I submit there was no question of volunteering at all, and that it is an action of duress forced upon an individual who values his freedom as much as any Member of this House or any being in this country, to do a thing which you cannot force upon the Army, Navy, Air Force, Police, or Fire Brigade, all of which are voluntary organisations Yet this man has been compelled to serve for a year.
We argue that it is because of the political colour of the Hartlepool Council—[Interruption.]—Oh, yes, it has a majority of Tories—who have used their powers against a man who is active in the Labour movement in his county. That is what we believe and, rightly or wrongly, that is the belief that my union holds. It is a union with 750,000 members, and it holds very seriously that this was an encroachment upon the liberty of the individual. The Under-Secretary of State quoted the sovereign rights of Parliament. He said that this was the place

in which we could make the last appeal. I submit that I have justified the claim that a member of the community of Great Britain has had his liberty assailed in such a manner, and that he brings his grievance to Parliament. I hope that the result will be a remedy of that grievance, the elimination of his declaration, and that the man will be granted again his freedom.

11.22 p.m.

Mr. Lloyd: I agree with what the hon. Gentleman has said, that this is one of the examples of what we have been discussing earlier in the day, in which a question of civil liberty can be raised in this House. I think it is right to say that it falls within the second class that I mentioned, that is, the power of this House to discuss any grievance whatsoever that arises in the State. The House appreciates, of course, that my right hon. Friend has no direct responsibility for the state of affairs under discussion. Before I deal with the matter in general, perhaps I might, as briefly as I can, because I want to get on to the more essential points, observe that it is only fair to say, on the party point which the hon. Gentleman raised, that this is a question not for the town council but for the justices, who have the power in this matter. It is not a question of any elected body having jurisdiction. There is no doubt about that at all.
Let me say at the outset that there is no disagreement on the general principle that if a man is to be appointed to act as an emergency special constable, that man ought to be a person who is perfectly willing to do so. There has never been an attempt by any authority who is concerned in this case, so far as I understand, or any similar case to force unwilling people to have their names entered on a list of persons willing to act as special constables, if need arose. Let me explain why that statement differs from the perfectly just case put forward by the hon. Member.
The procedure of this Act is rather complicated. What I propose to do first is to discuss very briefly the facts of the case and then pass on to the rather broader questions of principle raised in regard to the Statute, which is the operative factor in this matter.
Under the Municipal Corporations Act, 1882, justices in every borough are empowered to appoint persons to serve as


special constables, if at any time an emergency should arise with which the ordinary police forces are insufficient to deal. Use is made of this power in a number of boroughs, and the ordinary procedure is that, in order to enable the justices to make these appointments, the chief constable prepares a list of persons who are willing to render service if the need should arise. We have made inquiries, and I am informed that such a list was prepared by the chief constable of Hartlepool, and among the people whom he proposed to place on the list was Mr. Lant. In accordance with the usual procedure, an officer was sent to Mr. Lant's house to inform him that it was proposed to submit his name to the justices. Mr. Lant was out at the time, but a message was left for him. A fortnight elapsed during which no objection was made by him, and it was assumed that he had no objection to his name going forward. Accordingly, it was included in the list with several others, and these names were submitted to the justices, and they appointed 180 persons to act as special constables, one of them being Mr. Lant. The Act of 1882 provides that, after the justices have appointed persons under this procedure to act as special constables, such persons shall make a declaration that they will perform the duties of a special constable. The persons appointed were reminded of this duty, and it was at this stage, according to my information, that Mr. Lant indicated unwillingness to serve or to make a declaration.
For the purpose of securing that every person appointed a special constable shall make the statutory declaration, the Act of 1882 provides that a person who fails to make the statutory declaration shall be liable to a penalty not exceeding £5. No question, however, arose of Mr. Lant being subjected to this penalty, because he told the police that he would be prepared to help them at any time, and that he would be willing to sign a declaration, but that he would rather be excused another year. It is clear, now that it is known that Mr. Lant does not wish to be appointed, that he will not be appointed in another year. No one at any time, I am informed, attempted to coerce him to undertake the duties, and no question has arisen of subjecting him to a penalty. I have complete sympathy with the hon. Member's view that if there is a risk of coercing unwilling people into

being special constables, that risk should be removed. I have given special consideration to the question whether there is any such risk, and I cannot imagine that any such risk would normally arise. I cannot imagine that normally any chief constable would submit to the justices the name of an unwilling person, or that any justices would appoint a person if they knew that he was unwilling. I have gone further, however. I have considered whether there is any possibility, supposing that any justices were so unreasonable as to want to coerce unwilling people into accepting appointment as special constables, that they could do so. I am told it is arguable that the power of the justices, under this Act, to appoint special constables is not in law limited to persons who signify their assent. As far as the Home Office is concerned, we shall be quite willing, whenever an opportunity arises for introducing legislation in which any amendment of this Act could be included, to insert a provision making it perfectly clear that the power of the justices, under this Act, to appoint persons to act as special constables shall be exercised only as regards persons who are willing to accept such appointment.

Mr. Alexander: Will you release him, then?

Mr. Lloyd: I will merely say that the powers of the executive in this matter are limited. There is no such power. It is, I think, important that this matter should have been ventilated. But, as far as we are aware, this is the only case that has ever arisen under this Act, which has been in force since 1882, and so I cannot consider that it is an urgent one. I conclude by expressing the hope that the hon. Member and the House will think that in this case, the procedure of raising a subject by question and answer and on the Motion for the Adjournment, has not been followed unsuccessfully and has proved its value.

Mr. Benjamin Smith: While thanking the hon. Member for his statement, and realising that he has gone as far as he can within the powers he has, I hope this discussion will have the effect of telling the Justices in Hartlepools that this man should be immediately released.

Adjourned accordingly at Twenty-nine minutes after Eleven o'Clock.